The Ewing's sarcoma (EWS) oncogene contains an N-terminal transcriptional activation domain (EWS activation domain, EAD) and a C-terminal RNA-binding domain (RBD). Although it has been established that the EAD is a potent trans-activation domain that is required for the oncogenic activity of several EWS fusion proteins (EFPs), the precise function of the RBD and the normal role of intact EWS are poorly characterized. Here we show that a cis-linked RBD can strongly and specifically repress trans-activation by the EAD. Fusion proteins containing the RBD are expressed at normal levels, are nuclear-localized, and can bind to DNA both in vitro and in vivo, demonstrating that the RBD represses trans-activation directly at the promoter. The RNA recognition motif within the RBD is not required for repression, whereas regions of the RBD containing multiple RGG motifs play a critical role. The finding that the RBD can antagonize transcriptional activation by EWS provides the first direct evidence of a role for the RBD in transcription. Further studies of the repression phenomenon should illuminate key molecular interactions that distinguish EWS from EFPs and provide insights into the normal cellular function of EWS.