Edited by Mark T. Groudine, Fred Hutchinson Cancer Research Center, Seattle, WA, and approved August 6, 2007 (received for review May 2, 2007)

TLX is a transcription factor that is essential for neural stem cell proliferation and self-renewal. However, the molecular mechanism of TLX-mediated neural stem cell proliferation and self-renewal is largely unknown. We show here that TLX recruits histone deacetylases (HDACs) to its downstream target genes to repress their transcription, which in turn regulates neural stem cell proliferation. TLX interacts with HDAC3 and HDAC5 in neural stem cells. The HDAC5-interaction domain was mapped to TLX residues 359–385, which contains a conserved nuclear receptor–coregulator interaction motif IXXLL. Both HDAC3 and HDAC5 have been shown to be recruited to the promoters of TLX target genes along with TLX in neural stem cells. Recruitment of HDACs led to transcriptional repression of TLX target genes, the cyclin-dependent kinase inhibitor, p21CIP1/WAF1(p21), and the tumor suppressor gene, pten. Either inhibition of HDAC activity or knockdown of HDAC expression led to marked induction of p21 and pten gene expression and dramatically reduced neural stem cell proliferation, suggesting that the TLX-interacting HDACs play an important role in neural stem cell proliferation. Moreover, expression of a TLX peptide containing the minimal HDAC5 interaction domain disrupted the TLX–HDAC5 interaction. Disruption of this interaction led to significant induction of p21 and pten gene expression and to dramatic inhibition of neural stem cell proliferation. Taken together, these findings demonstrate a mechanism for neural stem cell proliferation through transcriptional repression of p21 and pten gene expression by TLX–HDAC interactions.