The PIAS proteins (protein inhibitor of activated STAT) were originally identified as inhibitors of the JAK-STAT pathway. Subsequently, their roles on transcriptional regulation have been identified in modulation of the androgen receptor (AR) and other nuclear hormone receptor-mediated actions. Zimp7, also named Zmiz2, is a novel PIAS-like protein and functions as a transcriptional co-activator. In this study, we demonstrate an interaction between Zimp7 and PIAS proteins with higher preference for PIAS3. A modified mammalian one-hybrid assay showed that the NH(2)-terminal proline-rich domain of Zimp7 and the region spanning amino acids 321-486 of PIAS3 were the primary interaction segments. The interaction between Zimp7 and PIAS3 proteins was further confirmed by in vitro protein pull-down and co-immunoprecipitation assays with both exogenous and endogenous proteins. Expression of exogenous PIAS3 further enhances Zimp7-mediated augmentation of AR transcription. Knockdown of the endogenous PIAS3 protein using a specific PIAS3 small hairpin RNA reduced the augmentation of Zimp7 on AR-mediated transcription. Co-localization of Zimp7 and PIAS3 proteins was observed in the nuclei of cells by immunostaining. Exogenous PIAS3 expression enhances the stability of the Zimp7 protein. Using chromatin immunoprecipitation assays, we showed that PIAS3 is involved in the AR- and Zimp7-formed protein complex(es) in the AR downstream target promoter to facilitate androgen-induced transcription. Finally, we further demonstrated that loss of Zimp7 significantly impaired PIAS3-mediated enhancement on AR activity in mouse Zimp7 null (zimp7(-/-)) embryonic fibroblasts. Taken together, these results demonstrate a novel interaction between PIAS and PIAS-like proteins and elucidate a novel regulatory mechanism for PIAS proteins in AR-mediated transcription.