Transcription factors that bind to cAMP-responsive elements (CREs) regulate the expression of target genes in response to activation of the adenylyl cyclase pathway. It is generally thought that activation is obtained through direct phosphorylation by the cAMP-dependent protein kinase-A. We have isolated the gene CRE modulator (CREM), which encodes multiple members of the CRE-binding protein family, by cell-specific alternative splicing. Various isoforms have been characterized, encoding both repressors (CREM alpha, -beta, and -gamma) as well as activators (CREM tau). Here we show that the function of the activator CREM tau is regulated by the p34cdc2 kinase. Multiple serine and threonine residues are phosphorylated in vivo as well as in vitro by p34cdc2. Although there is no effect of p34cdc2-mediated phosphorylation on CREM tau DNA binding, we observed a dramatic effect on the trans-regulatory function. Coexpression of a constitutively active p34cdc2 mutant shows that the trans-activation potential of CREM tau is strongly reduced by p34cdc2. This represents the first example of negative regulation of a transcription factor of this class by p34cdc2.