The ZNF217 oncoprotein is a constituent of a core transcriptional complex that includes CoREST, histone deacetylase 1/2, lysine demethylase 1, and the C-terminal binding protein 1/2. We have combined genome-wide expression profiling and chromatin immunoprecipitation with directed selection and ligation (ChIP-DSL) to identify a subset of genes directly regulated by ZNF217. Our results establish p15(ink4b) as a direct target of the ZNF217 complex. Downregulation of ZNF217 in MCF-7 breast cancer cells resulted in a dramatic increase in p15(ink4b) expression and coincided with increases in dimethylation of H3-K4 and, surprisingly, a decrease in K9/K14-H3 acetylation. Stimulation of HaCaT cells with transforming growth factor beta (TGF-beta) resulted in a release of ZNF217 and a concomitant binding of SMAD2 to the proximal promoter, which preceded increases in ink4b protein expression. Furthermore, the changes in chromatin marks at the p15(ink4b) promoter following TGF-beta stimulation were similar to those observed following ZNF217 downregulation. Collectively, these results establish the ZNF217 complex as a novel negative regulator of the p15(ink4b) gene and may constitute an important link between amplification of ZNF217 and the loss of TGF-beta responsiveness in breast cancer.