Protein phosphatase-1 (PP1) nuclear targeting subunit (PNUTS), also called PP1R10, p99, or CAT 53 was originally isolated as a mammalian nuclear PP1-binding protein. In this study, we performed yeast two-hybrid screens to identify PNUTS-interacting proteins. Here, we report that LCP1 (epidermal Langerhans cell protein 1), a novel member of the HMG-box protein family, binds tightly to PNUTS. Co-immunoprecipitation of deletion constructs revealed that the C-terminus of LCP1 is sufficient for the interaction with an N-terminal region of PNUTS that is distinct from its PP1-binding domain. Furthermore, immunofluorescence studies showed that a subpopulation of LCP1 co-localizes with PNUTS in nuclear speckles. Importantly, we found that the N-terminus of LCP1 has a strong trans-activation activity in a GAL4-based heterologous transcription assay. The transcriptional activity of LCP1 is markedly suppressed by its interaction with PNUTS, in a PP1-independent manner. These findings suggest that the coordinated spatial and temporal regulation of LCP1 and PNUTS may be a novel mechanism to control the expression of genes that are critical for certain physiological and pathological processes.