ATF-2 is a cellular basic region-leucine zipper (bZIP) transcription factor that can mediate diverse transcriptional responses, including activation by the adenovirus Ela protein. ATF-2 contains an activation domain, required for transcriptional activity, but in the absence of an appropriate inducer, full-length ATF-2 is transcriptionally inactive. Here we have investigated the mechanism underlying this regulated inhibition of ATF-2 transcriptional activity. We show that the region of ATF-2 that suppresses the activation region is the bZIP DNA-binding domain and that maximal inhibition requires both the basic region and leucine zipper subdomains. Inhibition is activation domain specific: The ATF-2 bZIP suppresses the ATF-2 and the related Ela activation domains but not acidic- and glutamine-rich activation domains. In vitro protein interaction assays demonstrate that the ATF-2 activation domain and bZIP specifically bind to one another. Finally, we show that bZIP-mediated inhibition can be modulated in a cell-type-specific manner by another sequence element within ATF-2. On the basis of these and other data, we propose that the ATF-2 bZIP and activation domain are engaged in an inhibitory intramolecular interaction and that inducers of ATF-2 disrupt this interaction to activate transcription.