The basic helix-loop-helix transcription factor DEC1 is expressed in a circadian manner in the suprachiasmatic nucleus where it seems to play a role in regulating the mammalian circadian rhythm by suppressing the CLOCK/BMAL1-activated promoter. The interaction of DEC1 with BMAL1 has been suggested as one of the molecular mechanisms of the suppression [Honma, S., Kawamoto, T., Takagi, Y., Fujimoto, K., Sato, F., Noshiro, M., Kato, Y. & Honma, K. (2002) Nature 419, 841-844]. Deletion analysis of DEC1 demonstrated that its N-terminal region, which includes the basic helix-loop-helix domain, was essential for both the suppressive activity and the interaction with BMAL1, as DEC1 lacking the basic region did not show any suppression or interaction. Furthermore, we found that Arg65 in the basic region, which is conserved among group B basic helix-loop-helix proteins, was responsible for the suppression, for the interaction with BMAL1 and for its binding to CACGTG E-boxes. However, substitution of His57 for Ala significantly reduced the E-box binding activity of DEC1, although it did not affect the interaction with BMAL1 or suppression of CLOCK/BMAL1-induced transcription. On the other hand, the basic region-deleted DEC1 acted in a dominant-negative manner for DEC1 activity, indicating that the basic region was not required for homodimer formation of DEC1. Moreover, mutant DEC1 also counteracted DEC2-mediated suppressive activity in a dominant-negative manner. The heterodimer formation of DEC1 and DEC2 was confirmed by pull-down assay. These findings suggest that the basic region of DEC1 participates in the transcriptional regulation through a protein-protein interaction with BMAL1 and DNA binding to the E-box.