We report here the characterization of Cha, a transcription factor of the basic helix-loop-helix (bHLH) family. The basic region of Cha shares DNA-interacting amino acids with members of class C bHLH transcription factors. In addition, the HLH region of Cha presents a Myc-type dimerization domain signature required for heterodimer formation between members of this class. Cha protein and mRNA were ubiquitously expressed in many human tissues. Electrophoretic mobility shift assays showed that Cha and upstream stimulatory factor (USF)-1 formed a complex that specifically bound to E-box DNA elements. Moreover, pull-down and co-immunoprecipitation experiments showed an interaction between Cha and USF-1. Cha did not bind to E-box DNA elements and required USF-1 for protein-DNA complex formation. Moreover, Cha inhibited USF-1-stimulated transcription of CD2 (a USF-1-dependent gene) and E-box promoter reporter plasmids. Chromatin immunoprecipitation assays showed that Cha occupied the CD2 promoter in resting, but not in mitogen-stimulated, T cells. Finally, Cha mRNA and protein expression were high in resting T cells and absent in mitogen-activated T cells and inversely correlated with CD2 expression. Contrarily, overexpression of Cha in T cells significantly reduced CD2 expression. In summary, our results indicated that Cha is a new bHLH transcription factor that negatively regulates USF-dependent transcription.