A crucial step in mammalian sex differentiation is the regression of the Müllerian ducts in males. This is achieved through the action of Müllerian inhibiting substance (MIS), a key hormone produced by fetal Sertoli cells. Proper spatiotemporal expression of the MIS gene requires the concerted action of several transcription factors that include Sox9, SF-1, WT-1, GATA-4, and Dax-1. Indeed, SF-1 contributes to MIS gene expression by transcriptionally cooperating with other factors such as GATA-4 and WT-1. Dax-1 is coexpressed with SF-1 in many tissues, including the gonads, where it acts as a negative modulator of SF-1-dependent transcription. We now report that Dax-1 can repress MIS transcription in Sertoli cells by disrupting transcriptional synergism between GATA-4 and SF-1. Dax-1-mediated repression of GATA-4/SF-1 synergism did not involve direct repression of GATA-dependent transactivation, but rather, it occurred through a direct protein-protein interaction with DNA-bound SF-1. It is interesting that SF-1, Dax-1, and GATA factors are coexpressed in several tissues such as the pituitary, the adrenals, and the gonads. Because we have shown that other GATA family members also have the ability to synergize with SF-1, Dax-1 repression of GATA/SF-1 synergism may represent an important mechanism for fine-tuning the regulation of SF-1-dependent genes in multiple target tissues.