Transcription initiation factor TFIID plays a central role in transcriptional regulation. Drosophila TFIID is a multimeric protein consisting of the TATA box-binding polypeptide (TBP) and a number of tightly associated polypeptides. Previously, the largest subunit of TFIID (p230) was cloned and demonstrated to inhibit the TATA-box binding of TBP in the absence of other subunits. Here we demonstrate that p230 contains at least two sites of interaction with TBP and that the N-terminal site mediates both strong physical interactions with TBP and inhibition of the TBP function. A detailed mutagenesis study shows that the inhibitory domain is indistinguishable from the strong TBP-binding domain, thus indicating that interaction of the p230 N-terminal region with TBP may directly control TATA-box binding.