It is emerging that covalent modifications of many transcription factors and co-factors by the small ubiquitin-like modifier (SUMO) can have a key role in modulating their transcriptional regulation. As SUMO modification is often associated with transcriptional repression, we studied whether it was involved in modulating the repressive activity of CoREST. We showed that CoREST can be modified by SUMO-1 at lysine 294. PIASx beta interacted with CoREST in vitro and in vivo, and functions as an E3-ligase to mediate its sumoylation. Furthermore, SENP1 mediated the desumoylation of CoREST. Interestingly, mutation of the CoREST sumoylation site compromised its ability as a corepressor. These results demonstrate that SUMO-1 modification modulates the transcriptional repression by CoREST and is needed for its full repressive activity. (C) 2008 Elsevier Inc. All rights reserved.