The Polycomb group (PcG) of proteins represses homeotic gene expression through the assembly of multi-protein complexes on key regulatory elements. The mechanisms mediating complex assembly have remained enigmatic since most PcG proteins fail to bind DNA. We now demonstrate that the human PcG protein dinG interacts with CP2, a mammalian member of the grainyhead-like family of transcription factors, in vitro and in vivo. The functional consequence of this interaction is repression of CP2-dependent transcription. The CP2-dinG interaction is conserved in evolution with the Drosophila factor grainyhead binding to dring, the fly homologue of dinG. Electrophoretic mobility shift assays demonstrate that the grh-dring complex forms on regulatory elements of genes whose expression is repressed by grh but not on elements where grh plays an activator role. These observations reveal a novel mechanism by which PcG proteins may be anchored to specific regulatory elements in developmental genes.