Transforming growth factor beta (TGF-beta) and tumor necrosis factor alpha (TNF-alpha) often exhibit antagonistic actions on the regulation of various activities such as immune responses, cell growth, and gene expression. However, the molecular mechanisms involved in the mutually opposing effects of TGF-beta and TNF-alpha are unknown. Here, we report that binding sites for the transcription factor CTF/NF-I mediate antagonistic TGF-beta and TNF-alpha transcriptional regulation in NIH3T3 fibroblasts. TGF-beta induces the proline-rich transactivation domain of specific CTF/NF-I family members, such as CTF-1, whereas TNF-alpha represses both the uninduced as well as the TGF-beta-induced CTF-1 transcriptional activity. CTF-1 is thus the first transcription factor reported to be repressed by TNF-alpha. The previously identified TGF-beta-responsive domain in the proline-rich transcriptional activation sequence of CTF-1 mediates both transcriptional induction and repression by the two growth factors. Analysis of potential signal transduction intermediates does not support a role for known mediators of TNF-alpha action, such as arachidonic acid, in CTF-1 regulation. However, overexpression of oncogenic forms of the small GTPase Ras or of the Raf-1 kinase represses CTF-1 transcriptional activity, as does TNF-alpha. Furthermore, TNF-alpha is unable to repress CTF-1 activity in NIH3T3 cells overexpressing ras or raf, suggesting that TNF-alpha regulates CTF-1 by a Ras-Raf kinase-dependent pathway. Mutagenesis studies demonstrated that the CTF-1 TGF-beta-responsive domain is not the primary target of regulatory phosphorylations. Interestingly, however, the domain mediating TGF-beta and TNF-alpha antagonistic regulation overlapped precisely the previously identified histone H3 interaction domain of CTF-1. These results identify CTF-1 as a molecular target of mutually antagonistic TGF-beta and TNF-alpha regulation, and they further suggest a molecular mechanism for the opposing effects of these growth factors on gene expression.