The COP9 signalosome is a conserved protein complex composed of eight subunits. Individual subunits of the complex have been linked to various signal transduction pathways leading to gene expression and cell cycle control. However, it is not understood how each subunit executes these activities as part of a large protein complex. In this study, we dissected structure and function of the subunit 1 (CSN1 or GPS1) of the COP9 signalosome relative to the complex. We demonstrated that the C-terminal half of CSN1 encompassing the PCI domain is responsible for interaction with CSN2, CSN3, and CSN4 subunits and is required for incorporation of the subunit into the complex. The N-terminal fragment of CSN1 cannot stably associate with the complex but can translocate to the nucleus on its own. We further show that CSN1 or the N-terminal fragment of CSN1 (CSN1-N) can inhibit c-fos expression from either a transfected template or a chromosomal transgene (fos-lacZ). Moreover, CSN1 as well as CSN1-N can potently suppress signal activation of a AP-1 promoter and moderately suppress serum activation of a SRE promoter, but is unable to inhibit PKA-induced CRE promoter activity. We conclude that the N-terminal half of CSN1 harbors the activity domain that confers most of the repression functions of CSN1 while the C-terminal half allows integration of the protein into the COP9 signalosome. (C) 2001 Academic Press.