p204, a member of the interferon-inducible p200 family of murine proteins, is primarily nucleolar, We generated cell lines in which p204 was inducible by muristerone, This induction resulted in retardation of cell proliferation and inhibition of rRNA transcription in vivo. Interferon treatment, resulting in p204 induction and retardation of proliferation, also caused inhibition of rRNA transcription in vivo. p204 also inhibited rRNA transcription in vitro. This inhibition was overcome by addition of UBF1, the rRNA-specific transcription factor. A direct interaction between p204 and UBF1 was revealed in vitro in pull-down assays, and in vivo by co-immunoprecipitation from cell extracts. UBF1 bound strongly to at least two regions of p204: the N-terminal segment linked to the conserved 200 amino acid a segment, and the conserved 200 amino acid b segment. Cleavage of the a or b segments into two segments (encoded by single exons) resulted in a strong decrease or loss of binding. The inhibition of rRNA transcription by p204 may be due to the inhibition by p204 of the specific DNA binding of UBF1. This was revealed in electrophoretic mobility shift, magnetic bead and footprinting assays. Thus, p204 serves as a mediator of the inhibition of rRNA transcription by interferon.