The cell fate determination factor DACH1 plays a key role in cellular differentiation in metazoans. DACH1 is engaged in multiple context-dependent complexes that activate or repress transcription. DACH1 can be recruited to DNA via the Six1/Eya bipartite transcription (DNA binding/coactivator) complex. c-Jun is a critical component of the activator protein (AP)-1 transcription factor complex and can promote contact-independent growth. Herein, DACH1 inhibited c-Jun-induced DNA synthesis and cellular proliferation. Excision of c-Jun with Cre recombinase, in c-junf1/f1 3T3 cells, abrogated DACH1-mediated inhibition of DNA synthesis. c-Jun expression rescued DACH1-mediated inhibition of cellular proliferation. DACH1 inhibited induction of c-Jun by physiological stimuli and repressed c-jun target genes (cyclin A, β-PAK, and stathmin). DACH1 bound c-Jun and inhibited AP-1 transcriptional activity, c-jun and c-fos were transcriptionally repressed by DACH1, requiring the conserved N-terminal (dac and ski/sno [DS]) domain. c-fos transcriptional repression by DACH1 requires the SRF site of the c-fos promoter. DACH1 inhibited c-Jun transactivation through the δ domain of c-Jun. DACH1 coprecipitated the histone deacetylase proteins (HDAC1, HDAC2, and NCoR), providing a mechanism by which DACH1 represses c-Jun activity through the conserved δ domain. An oncogenic v-Jun deleted of the δ domain was resistant to DACH1 repression. Collectively, these studies demonstrate a novel mechanism by which DACH1 blocks c-Jun-mediated contact-independent growth through repressing the c-Jun δ domain. © 2007 by The American Society for Cell Biology.