Prep1 is known to interact in vivo with Pbx1 to regulate development and organogenesis. We have identified a novel Prep1-interacting protein, p160 c-Myb binding protein (p160). p160 and Pbx1 compete for Prep1 in vitro, and p160 inhibits Prep1-dependent HoxB2 expression in retinoic acid-treated NT2-D1 cells. The N-terminal physiologically truncated form of p160, p67, binds the sequence 63LFPLL67 in the HR1 domain of Prep1. Mutation of both L63 and L66 impairs the binding of Prep1 to both p160/p67 and Pbx1. The sequences required to bind Prep1 are mainly located in residues 51 to 151. Immunofluorescence colocalization and coimmunoprecipitation of endogenous p160 and Prep1 are induced by ActD, which translocates p160 from the nucleolus to the nucleoplasm. These data therefore show that p160 is a novel regulator of Prep1-Pbx1 transcriptional activity.