The ATBF1 gene encodes two protein isoforms, the 404-kDa ATBF1-A, possessing four homeodomains and 23 zinc fingers, and the 306-kDa ATBF1-B, lacking a 920-amino acid N-terminal region of ATBF1-A which contains 5 zinc fingers. In vitro, ATBF1-A was expressed in proliferating C2C12 myoblasts, but its expression levels decreased upon induction of myogenic differentiation in low serum medium. Forced expression of ATBF1-A in C2C12 cells resulted in repression of MyoD and myogenin expression and elevation of Id3 and cyclin D1 expression, leading to inhibition of myogenic differentiation in low serum. In contrast, transfection of C2C12 cells with the ATBF1-B isoform led to an acceleration of myogenic differentiation, as indicated by an earlier onset of myosin heavy chain expression and formation of a higher percentage of multinucleated myotubes. The fourth homeodomain of ATBF1-A bound to an AT-rich element adjacent to the E1 E-box of the muscle regulatory factor 4 promoter mediating transcriptional repression. The ATBF1-A-specific N-terminal region possesses general transcription repressor activity. These results suggest that ATBF1-A plays a role in the maintenance of the undifferentiated myoblast state, and its down-regulation is a prerequisite to initiate terminal differentiation of C2C12 cells.