Cancer cells differ from normal cells in many characteristics including loss of differentiation and uninhibited cell proliferation. Recent studies have focused on the identification of factors contributing to cell growth and differentiation. Gut-enriched Krüppel-like factor (GKLF or KLF4) is a newly identified eukaryotic transcription factor and has been shown to play a role in regulating growth arrest. We have previously shown that GKLF mRNA levels were significantly decreased in colon cancer tissues, and that over-expression of GKLF in colonic adenocarcinoma cells (HT-29) resulted in reduction of cyclin D1 (CD1) mRNA and protein levels. The current study was undertaken to determine the mechanisms by which GKLF inhibited CD1 expression. In a transient transfection system, GKLF suppressed CD1 promoter activity by 55%. Sequential deletion and site-directed mutation analysis of the CD1 promoter have identified the sequence between -141 and -66, a region containing an Sp1 response element, to be essential for GKLF function. By electrophoretic mobility gel shift assay, recombinant GKLF and nuclear extracts from HT-29 cells were found to bind to the Sp1 motif on the CD1 promoter. The inhibitory effect of GKLF on the CD1 promoter activity was completely abolished by excessive amount of Sp1 DNA and GKLF significantly reduced the stimulatory function of Sp1 suggesting that GKLF and Sp1 may compete for the same binding site on the CD1 promoter. These results indicate that GKLF is a transcriptional repressor of the CD1 gene and that the inhibitory effect of GKLF is, in part, mediated by interaction with the Sp1 binding domain on its promoter.