Retinoids are therapeutically effective in the treatment of various cancers, and some of the therapeutic action of retinoids can be ascribed to their potent inhibition of AP-1 activity that regulates transcription of genes associated with cell growth. We recently reported that the expression of orphan receptor chicken ovalbumin upstream promoter-transcription factor (COUP-TF) plays a role in mediating the growth inhibitory effect of trans-retinoic acid (trans-RA) in cancer cells. To gain insight into the molecular mechanism by which COUP-TF regulates trans-RA activity, we evaluated the effect of COUP-TF on antagonism of AP-1 activity by trans-RA. Our results demonstrated a positive correlation between COUP-TF expression and the ability of trans-RA to inhibit AP-1 activity in various cancer cell lines. In transient transfection assay, expression of COUP-TF strongly inhibited tumor promoter 12-O-tetradecanoylphorbol-13-acetate-induced AP-1 transactivation activity and transactivation of c-Jun/c-Fos in both a trans-RA-dependent and -independent manner. In vitro studies demonstrated that the addition of COUP-TF inhibited c-Jun DNA binding through a direct protein-protein interaction that is mediated by the DNA binding domain of COUP-TF and the leucine zipper of c-Jun. Stable expression of COUP-TF in COUP-TF-negative MDA-MB231 breast cancer cells restored the ability of trans-RA to inhibit 12-O-tetradecanoylphorbol-13-acetate-induced c-Jun expression. The effect of COUP-TF in enhancing the trans-RA-induced antagonism of AP-1 activity required expression of retinoic acid receptors (RARs), since stable expression of COUP-TF in COUP-TF-negative HT-1376 bladder cancer cells, which do not express RARalpha and RARbeta, failed to restore trans-RA-induced AP-1 repression. Thus, COUP-TF, through its physical interaction with AP-1, promotes anticancer effects of retinoids by potentiating their anti-AP-1 activity.