We detected a novel nuclear protein, MRF, that binds to multiple sites on the modulator which is located upstream of the human cytomegalovirus major immediate early gene enhancer. The expression of MRF is differentiation specific; the DNA binding activity is present in nuclear extracts from undifferentiated Tera-2 and THP-1 cells, but significantly reduced after these cells are induced to differentiate. In undifferentiated cells the enhancer activity is repressed by the modulator and upon differentiation the enhancer becomes active. Competitive binding assays demonstrate that MRF requires the presence of multiple A+T stretches for binding to DNA, rather than binding to a specific DNA sequence. Mutations of these stretches in the modulator reduce the binding activity of MRF, as well as the repressing activity on the enhancer. These results suggest that MRF may act as a repressor of enhancer function. We propose that MRF binds over the entire modulator and exerts repressor activity.