Accumulative evidence suggests that more than 20 neuron-specific genes are regulated by a transcriptional cis-regulatory element known as the neural restrictive silencer (NRS). A trans-acting repressor that binds the NRS, NRSF [also designated RE1-silencing transcription factor (REST)] has been cloned, but the mechanism by which it represses transcription is unknown. Here we show evidence that NRSF represses transcription of its target genes by recruiting mSin3 and histone deacetylase. Transfection experiments using a series of NRSF deletion constructs revealed the presence of two repression domains, RD-1 and RD-2, within the N- and C-terminal regions, respectively. A yeast two-hybrid screen using the RD-1 region as a bait identified a short form of mSin3B. In vitro pull-down assays and in vivo immunoprecipitation-Western analyses revealed a specific interaction between NRSF-RD1 and mSin3 PAH1-PAH2 domains. Furthermore, NRSF and mSin3 formed a complex with histone deacetylase 1, suggesting that NRSF-mediated repression involves histone deacetylation. When the deacetylation of histones was inhibited by tricostatin A in non-neuronal cells, mRNAs encoding several neuronal-specific genes such as SCG10, NMDAR1, and choline acetyltransferase became detectable. These results indicate that NRSF recruits mSin3 and histone deacetylase 1 to silence neural-specific genes and suggest further that repression of histone deacetylation is crucial for transcriptional activation of neural-specific genes during neuronal terminal differentiation.