The Gfi-1 proto-oncogene is activated by provirus insertion in T-cell lymphoma lines selected for interleukin-2 (IL-2) independence in culture and in primary retrovirus-induced thymomas and encodes a nuclear, sequence-specific DNA-binding protein. Here we show that Gfi-1 is a position- and orientation-independent active transcriptional repressor, whose activity depends on a 20-amino-acid N-terminal repressor domain, coincident with a nuclear localization motif. The sequence of the Gfi-1 repressor domain is related to the sequence of the repressor domain of Gfi-1B, a Gfi-1-related protein, and to sequences at the N termini of the insulinoma-associated protein, IA-1, the homeobox protein Gsh-1, and the vertebrate but not the Drosophila members of the Snail-Slug protein family (Snail/Gfi-1, SNAG domain). Although not functionally characterized, these SNAG-related sequences are also likely to mediate transcriptional repression. Therefore, the Gfi-1 SNAG domain may be the prototype of a novel family of evolutionarily conserved repressor domains that operate in multiple cell lineages. Gfi-1 overexpression in IL-2-dependent T-cell lines allows the cells to escape from the G1 arrest induced by IL-2 withdrawal. Since a single point mutation in the SNAG domain (P2A) inhibits both the Gfi-1-mediated transcriptional repression and the G1 arrest induced by IL-2 starvation, we conclude that the latter depends on the repressor activity of the SNAG domain. Induction of Gfi-1 may therefore contribute to T-cell activation and tumor progression by repressing the expression of genes that inhibit cellular proliferation.