Embryonic stem (ES) cells are pluripotent cells derived from the inner cell mass of blastocysts. Transcription factor Oct3/4 is an indispensable factor in the self-renewal of ES cells. In this study, we searched for a protein that would interact with Oct3/4 in ES cells and identified an orphan nuclear hormone receptor, Dax1. The association of Dax1 with Oct3/4 was mediated through the POU-specific domain of Oct3/4. Ectopic expression of Dax1 inhibited Oct3/4-mediated activation of an artificial Oct3/4-responsive promoter. Expression of Dax1 in ES cells also reduced the activities of Nanog and Rex1 promoters, while knockdown of Dax1 increased these activities. Pulldown and gel shift assays revealed that the interaction of Dax1 with Oct3/4 abolished the DNA binding activity of Oct3/4. Chromatin immunoprecipitation assay results showed that Dax1 inhibited Oct3/4 binding to the promoter/enhancer regions of Oct3/4 and Nanog. Furthermore, overexpression of Dax1 resulted in ES cell differentiation. Taken together, these data suggest that Dax1, a novel molecule interacting with Oct3/4, functions as a negative regulator of Oct3/4 in ES cells.