INSM1/IA-1 (insulinoma-associated 1) is a developmentally regulated zinc-finger transcription factor, exclusively expressed in the foetal pancreas and nervous system, and in tumours of neuroendocrine origin. We have identified an INSM1 binding site in the neuroD/beta2 promoter and demonstrated transcriptional repressor activity of INSM1 by transient transfection assay. A chromatin immunoprecipitation assay confirmed that in vivo INSM1 is situated on the promoter region of the neuroD/beta2 gene. In an attempt to elucidate the molecular mechanism of transcriptional repression by the INSM1 gene, cyclin D1 was identified as an interacting protein by using a 45-day-old human foetal brain cDNA library and a yeast two-hybrid screen. The physical association between INSM1 and cyclin D1 was confirmed by in vitro and in vivo pull-down assay. Cyclin D1 co-operates with INSM1 and suppresses neuroD/beta2 promoter activity. Co-immunoprecipitation of INSM1, cyclin D1 and HDACs (histone deacetylases) in mammalian cells revealed that INSM1 interacts with HDAC-1 and -3 and that this interaction is mediated through cyclin D1. Overexpression of cyclin D1 and HDAC-3 significantly enhanced the transcriptional repression activity of INSM1 on the neuroD/beta2 promoter. A further chromatin immunoprecipitation assay confirmed that HDAC-3 occupies this same region of the neuroD/beta2 promoter, by forming a transcription complex with INSM1. Thus we conclude that INSM1 recruits cyclin D1 and HDACs, which confer transcriptional repressor activity.