Adeno-associated virus (AAV) Rep78 is a multifunctional protein that is required for AAV transcriptional activity, AAV DNA replication, and possibly for site-specific integration of AAV into human chromosome 19. Rep78 is also able to inhibit a variety of heterologous promoters, including those of c-H-ras, human papillomavirus types 16 and 18, and HIV type 1. However, Rep78 is unable to significantly affect murine osteosarcomavirus (MSV). It was noticed that promoters that are inhibited possess binding motifs for the cellular transcription factor Sp1, whereas the MSV long terminal repeat promoter did not. These data stimulated the hypothesis that Rep78 may recognize and interact with cellular Sp1. Here, we demonstrate that Rep78 is able to interact with Sp1 in vitro as analyzed by West(far)-Western, electrophoretic mobility shift assay-supershift, and coimmunoprecipitation analyses. Furthermore, in support of an in vivo biological effect from this interaction, Rep78 is demonstrated to inhibit a synthetic, Sp1-dependent promoter. Further still, the insertion of Sp1 DNA binding motifs into the Rep78-resistant MSV long terminal repeat results in a promoter that has increased sensitivity to inhibition by Rep78. Finally, it is demonstrated that the Sp1-Rep78 interaction requires the amino half of Rep78. The interaction of Rep78 with Sp1, along with possible downstream effects on the transcription initiation process of RNA polymerase II, may partially explain the rather broad-based antitumor abilities of AAV.