Many of the antimicrobial, immunomodulatory and cell growth inhibitory activities of the interferons are mediated by interferon-inducible proteins. Earlier we characterized an interferon-inducible murine protein, p202, whose expression in transfected cells inhibits cell proliferation and which can form a complex with retinoblastoma protein (pRb). Here we report that in transfected cells expression of p202 inhibits E2F-stimulated transcription of a reporter gene and of endogenous genes. Inhibition of the transcriptional activity of E2F by p202 does not depend on fully functional pRb and is correlated with inhibition of the sequence-specific DNA binding of E2F. p202 interacts with the transcription factor E2F (E2F-1/DP-1) in vitro and in vivo. Inhibition of E2F activity by p202 may contribute to growth inhibition by the interferons.