The C-terminal binding protein 2 (CtBP2) is a 48 kDa phosphoprotein reported to function as a co- repressor for a growing list of transcriptional repressors. It was recently demonstrated that CtBP is a dimeric NAD+-regulated d-isomer-specific 2-hydroxy acid dehydrogenase. However, the specific substrate(s) of CtBP enzymatic activity and the relationship of this activity to its co-repression function remain unknown. The ability of a human CtBP to bind and serve as a co-repressor of E1A has been shown to be regulated by nuclear NADH levels. Here we extend the functional characterization of CtBP by demonstrating that amino acid substitutions at Gly189 in the conserved NAD+-binding fold both abrogate the ability of CtBP2 to homodimerize and are associated with a dramatic loss of co-repressor activity. Consistent with the known enzymatic activity of CtBP2, mutations at Arg272 in the substrate-binding domain and at His321 in the catalytic domain result in significant loss of CtBP2 transcriptional co-repressor activity. High resolution serial C-terminal deletion analysis of CtBP2 also revealed a novel N-terminal repression domain that is distinct from its dehydrogenase domain. Our results suggest a model in which CtBP2 co-repressor function is regulated, at least in part, through the effect of NADH on CtBP2 homodimerization.