We examined the mechanism by which the C-terminal 236 amino acids of the even-skipped protein (region CD) repress transcription. A fusion protein, CDGB, was created that contains region CD fused to the glucocorticoid receptor DNA binding domain. This protein repressed transcription in an in vitro system containing purified fractions of the RNA polymerase II general transcription factors, and repression was dependent upon the presence of high-affinity glucocorticoid receptor binding sites in the promoter. Repression by CDGB was prevented when the promoter DNA was preincubated with TFIID or TBP, whereas preincubation of the template DNA with CDGB prevented TFIID binding. Together, these results strongly imply that CDGB represses transcription by inhibiting TFIID binding, and further experiments suggested a mechanism by which this may occur. Region CD can mediate cooperative interactions between repressor molecules such that molecules bound at the glucocorticoid receptor binding sites stabilize binding of additional CDGB molecules to low-affinity binding sites throughout the basal promoter. Binding to some of these low-affinity sites was shown to contribute to repression. Further experiments suggested that the full-length eve protein also represses transcription by the same mechanism. We speculate that occupancy of secondary sites within the basal promoter by CDGB or the eve protein inhibits subsequent TFIID binding to repress transcription, a mechanism we term cooperative blocking.