Edited by Xiao-Fan WangURI (unconventional prefoldin RPB5 interactor protein) is an unconventional prefoldin, RNA polymerase II interactor that functions as a transcriptional repressor and is part of a larger nuclear protein complex. The components of this complex and the mechanism of transcriptional repression have not been characterized. Here we show that KAP1 (KRAB-associated protein 1) and the protein phosphatase PP2A interact with URI. Mechanistically, we show that KAP1 phosphorylation is decreased following recruitment of PP2A by URI. We functionally characterize the novel URI-KAP1-PP2A complex, demonstrating a role of URI in retrotransposon repression, a key function previously demonstrated for the KAP1-SETDB1 complex. Microarray analysis of annotated transposons revealed a selective increase in the transcription of LINE-1 and L1PA2 retroelements upon knockdown of URI. These data unveil a new nuclear function of URI and identify a novel post-transcriptional regulation of KAP1 protein that may have important implications in reactivation of transposable elements in prostate cancer cells.The URI (unconventional prefoldin RPB5 interactor protein) has structural homology to members of the prefoldin family of molecular chaperones. URI protein is distributed throughout the cell to coordinate cellular processes involving metabolism, proliferation, and gene expression. In the mitochondria, URI binds and represses PP1␥ phosphatase, thus sustaining survival signaling through the mToR pathway (1, 2). Cytoplasmic URI is part of the Hsp90 and R2TP/prefoldin-like complex that assembles RNA polymerase II before nuclear translocation (3, 4). In the nucleus, URI functions as a transcriptional repressor that binds RPB5, the shared subunit of the RNA polymerases (5). Despite several reports demonstrating that URI binds assembling (3) and transcribing (6) RNA polymerase II, and key regulators of RNA polymerase II transcription (7, 8) and in conjunction with prefoldin-like protein ART-27, represses androgen receptor-dependent gene expression (9) in prostate cells, little is known about the mechanism of URI transcriptional repression. In Saccharomyces cerevisiae, URI binds the phosphorylated C-terminal domain (CTD) 2 of RNA polymerase II and affects the recruitment of the chromatin remodeling complex RSC (10).Here we show that in the nucleus URI interacts with KAP1 and the protein phosphatase PP2A. KAP1 is recruited on the DNA by zinc finger transcription factors containing a KRAB domain (KRAB-ZFP) (11,12). KAP1 functions as a scaffold for the recruitment of a repression complex that includes histone deacetylases (13), HP1 (heterochromatin protein 1) (14), and the histone methyltransferase SETDB1 (15). The assembly of the KAP1 repression complex is tightly controlled. SUMOylation of KAP1 is necessary for recruitment of the repression machinery. ATM phosphorylation of KAP1 on Ser 824 interferes with KAP1 SUMOylation and consequently, relieves the KAP1-mediated transcription repression through displacement of the repression compl...