The basic helix-loop-helix (bHLH) gene Hes7 is expressed in an oscillatory manner and regulates the periodic somite formation. Oscillatory expression of Hes7 depends on negative feedback and rapid degradation of the gene products, but the precise mechanisms of how the transcriptional activity and the degradation of Hes7 protein are regulated remain to be analyzed. Here, we found that lysine residues (K22, K52, and K55) in the bHLH domain are essential not only for the instability of Hes7 protein but also for the transcriptional repressor activity. Introduction of lysine-to-arginine mutations into the bHLH domain led to stabilization of Hes7 protein and to abnormalities in either the N box-binding activity or partner preference in heterodimer formation. These results indicate that common amino acid residues are involved in both the transcriptional repressor activity and the instability of Hes7 protein, suggesting of a critical link between the transcription and degradation control.