The LIM domain protein KyoT2 negatively regulates the Notch signaling pathway through interaction with RBP-J, the core element of the Notch signaling pathway in the nucleus. Here we show that PIAS1 (the protein inhibitor of activated STAT1) interacts with KyoT2 directly and attenuates KyoT2-mediated transcriptional repression. We demonstrate that KyoT2 is modified by SUMOylation at two lysine residues, K144 and K171. SUMOylation of the transfected KyoT2 is enhanced by PIAS1 but not hPc2, another KyoT2-interacting protein with SUMO E3 ligase activity, and is repressed by a PIAS1 mutant that is deficient of E3 ligase activity. Using mutants disrupting either or both of the SUMO sites, we show that SUMOylation of KyoT2 does not influence its expression, intracellular localization, or interaction with known partners. However, disruption of the K171 SUMOylation site does reinforce the transcriptional repression activity of KyoT2, suggesting that SUMOylation of this site counters the repression activity of KyoT2. Finally, we show that PIAS1 fails to attenuate the repression activity of the K171R mutant of KyoT2, suggesting that PIAS1 may potentially antagonize the transcriptional repression activity of KyoT2 through catalyzing its SUMOylation at K171. These results suggest that KyoT2 is a substrate of SUMO modification catalyzed by PIAS1, and that SUMOylation may modulate the transcriptional repression effect of KyoT2 on the Notch/RBP-J signaling pathway.