Luman/CREB3 (also called LZIP) is an endoplasmic reticulum (ER)-bound cellular transcription factor. It has been implicated in the mammalian unfolded protein response (UPR), as well as herpes simplex virus reactivation from latency in sensory neurons. Here, we report the identification of a novel Luman recruitment factor (LRF). Like Luman, LRF is a UPR-responsive basic-region leucine zipper protein that is prone to proteasomal degradation. Being a highly unstable protein, LRF interacts with Luman through the leucine zipper region and promotes Luman degradation. LRF was found to recruit the nuclear form of Luman to discrete nuclear foci, which overlap with the nuclear receptor coactivator GRIP1 bodies, and repress the transactivation activity of Luman. Compared to LRF+/+ mouse embryonic fibroblast (MEF) cells, the levels of CHOP, EDEM, and Herp were elevated in LRF-/- MEF cells. We propose that LRF is a negative regulator of the UPR. For Luman, it may represent another level of regulation following Luman proteolytic cleavage on the ER and nuclear translocation. In addition to inducing rapid Luman turnover, LRF may repress the transactivation potential of Luman by sequestering it in the LRF nuclear bodies away from key cofactors (such as HCF-1) that are required for transcriptional activation.