Cell type and developmental stage expression of the myelin basic protein (MBP) gene in mouse brain is regulated at the transcriptional level. Earlier studies from our laboratory have led to the identification of a DNA binding protein from mouse brain, named Pur alpha, which interacts with the MB1 regulatory motif of the MBP and stimulates its transcription in glial cells. In this report, we demonstrate that a cellular RNA, with significant homology to 7 SL RNA is associated with Pur alpha, Results from band shift competition studies indicate that Pur alpha-associated RNA (PU-RNA), inhibits the interaction of immunopurified Pur alpha with the MB1 DNA sequence, Re suits from Northern blot studies indicated that PU-RNA is expressed during various stages of brain development. Of interest, this RNA was found in association with Pur alpha that was produced in the mouse brain at the early stage of brain development. Results from Northwestern analysis using a PU-RNA probe identified the regions within Pur alpha that are important for Pur alpha/PU-RNA association. Production of Purer at the early stage of brain development and its association with PU-RNA at this stage, when Pur alpha exhibits poor binding ability to the MB1 DNA sequence, suggests that PU-RNA may function as a co-factor that negatively regulates Pur alpha interaction with the MBP promoter sequence.