cAMP response element binding protein (CREB)-binding protein (CBP) is a multifunctional transcriptional coactivator that plays important roles in gene regulation. CBP is expressed in murine embryonic orofacial tissue, where it is developmentally regulated. To identify nuclear factors associated with CBP in developing orofacial tissue, a yeast two-hybrid screen of a cDNA library derived from embryonic orofacial tissue from gestational days 11-13 mouse embryos was conducted. Using the carboxy terminal region of CBP as bait, the protein inhibitor of activated Stat1 (PIAS1) was identified as a novel CBP binding protein. The association of PIAS1 with CBP was confirmed in vitro by glutathione S-transferase (GST) pull-down assays and in vivo by coimmunoprecipitation. Reporter assays demonstrated that PIAS1 inhibited CBP-mediated transcriptional activation in the presence or absence of transforming growth factor-beta (TGF-beta). These results identify PIAS1 as a novel binding partner for CBP and inhibitor of CBP-mediated transcription, suggesting that PIAS1 might play a role in regulating cell proliferation, migration, and differentiation during embryonic development.