The cytokine interleukin-6 (IL-6) plays key roles in the immune and inflammatory responses, acute-phase reaction and hematopoiesis. Such biological actions of IL-6 are characterised by both the activation and the inhibition of gene transcription. Unfortunately, in contrast to gene activation, the mechanism by which IL-6 suppresses transcription remains largely unclear. We have, therefore, investigated this aspect using the Xenopus laevis CCAAT/enhancer binding protein-alpha (C/EBPalpha) gene promoter as a model. We show by transient transfection assays of various promoter-luciferase DNA constructs into hepatoma cells that a C/EBP recognition sequence in the proximal promoter region is essential for the IL-6-mediated repression. Electrophoretic mobility shift assays showed that C/EBPalpha was the major protein that bound to this site and, consistent with its expression pattern, the binding was reduced when the cells were exposed to IL-6. Co-transfection assays revealed for the first time that the ability of C/EBPalpha, but not C/EBPbeta or Sp1, to transactivate the promoter was decreased dramatically when the cells were incubated with IL-6. These studies, therefore, identify a novel mechanism for IL-6-mediated repression of gene transcription that involves a reduction in C/EBPalpha-mediated activation.