The Drosophila 230-kDa TFIID subunit (dTAF230) interacts with the DNA binding domain of TATA box-binding protein (TBP) which exists in the same complex. Here, we characterize the inhibitory domain in the yeast TAF145 (yTAF145), which is homologous to dTAF230. Mutation studies show that the N-terminal inhibitory region (residues 10 to 71) can be divided into two subdomains, I (residues 10 to 37) and II (residues 46 to 71). Mutations in either subdomain significantly impair function. Acidic residues in subdomain II are important for the interaction with TBP. In addition, yTAF145 interaction is impaired by mutating the basic residues on the convex surface of TBP, which are crucial for interaction with TFIIA. Consistently, TFIIA and yTAF145 bind competitively to TBP. A deletion of the inhibitory domain of yTAF145 leads to a temperature-sensitive growth phenotype. Importantly, this phenotype is suppressed by overexpression of the TFIIA subunits, indicating that the yTAF145 inhibitory domain is involved in TFIIA function.