Groucho is a corepressor that forms a macromolecular complex for its corepressor activity, in which HDAC1 is an essential component for the modulation of chromatin structure and transcriptional repression of target genes. Here, we show that Groucho is covalently conjugated with small ubiquitin-related modifier-1 (SUMO-1) in vitro and in vivo. SUMO conjugations of Groucho occur at four different lysine residues. Substitutions of all these residues abolished sumoylation of Groucho and inhibited its corepressor activity. In addition, Groucho corepressor activity was reduced by inhibition of SUMO-1 conjugation via Ubc9 knockdown through expression of short-hairpin RNA against Ubc9. Furthermore, interactions between Groucho and HDAC1 are enhanced by sumoylation of Groucho, which is mediated by the SUMO-interaction motif of HDAC1. Taken together, these findings indicate that Groucho sumoylation increases its corepressor activity by enhancing the recruitment of HDAC1 to Groucho corepressor complex.