Steroid receptor coactivators (SRCs) exert profound effects on animal development and physiology. These coactivators are nuclear proteins and transcription co-regulators that function to facilitate the transcription initiation mediated by nuclear receptors, as well as by other well-known transcription factors. However, how these co-regulators are functionally regulated is poorly understood. During genome-wide screening for SRC-interacting proteins, we identified a novel ankyrin repeat containing protein, SIP (SRC-Interacting Protein), which interacts with SRC coactivators in the cytoplasm. We demonstrated that extracellular stimuli such as the addition of estrogen, induced phosphorylation of SIP in its PEST (Proline, Glutamate, Serine, and Threonine rich) domain by casein kinase II. The phosphorylation of SIP resulted in dissociation of SRC proteins from SIP in the cytoplasm and led to subsequent nuclear translocation of SRC proteins and gene coactivation. Both gain-of-function and loss-of-function experiments indicate that SIP functions to sequester SRC coactivators in the cytoplasm and buffer the availability of these coactivators, thus providing a mechanism for the regulation of the transcription regulators.