In eukaryotic cells, the Ccr4-Not complex can regulate mRNA metabolism at various levels. Previously, we showed that promoter targeting of the CNOT2 subunit resulted in strong repression of RNA polymerase II transcription, which was sensitive to the HDAC (histone deacetylase) inhibitor, trichostatin A [Zwartjes, Jayne, van den Berg and Timmers (2004) J. Biol. Chem. 279, 10848-10854]. In the present study, the cofactor requirement for CNOT2-mediated repression was investigated. We found that coexpression of SMRT (silencing mediator for retinoic acid receptor and thyroid-hormone receptor) or NCoR (nuclear hormone receptor co-repressor) in combination with HDAC3 (or HDAC5 and HDAC6) augmented the repression by CNOT2. This repressive effect is mediated by the conserved Not-Box, which resides at the C-terminus of CNOT2 proteins. We observed physical interactions of CNOT2 with several subunits of the SMRT/NCoR-HDAC3 complex. Our results show that the SMRT/NCoR-HDAC3 complex is a cofactor of CNOT2-mediated repression and suggest that transcriptional regulation by the Ccr4-Not complex involves regulation of chromatin modification.