The C-terminal region of adenovirus E1A interacts with the transcriptional corepressor, CtBP. The mechanism of transcriptional regulation by CtBP is not known. CtBP shares a significant homology with NAD(+)-dependent D2-hydroxy acid dehydrogenases. CtBP binds to NAD(+) and NADH. Both forms of the dinucleotide stimulate oligomerization of native CtBP and enhance complex formation with E1A. CtBP also has a slow dehydrogenase activity. Interaction of CtBP with E1A reduces the dehydrogenase activity. Our results raise the possibility that the oxidation/reduction reactions of CtBP may regulate transcription. Thus, CtBP is a unique transcriptional regulator with an enzymatic activity similar to metabolic dehydrogenases. The levels of intracellular nicotinamide adenine dinucleotide may modulate transcriptional activity of CtBP.