The retinoblastoma tumor suppressor protein, Rb, interacts directly with the largest TATA-binding protein-associated factor, TAF(II)250, through multiple regions in each protein. To define the potential role(s) of this interaction, we examined whether Rb could regulate the intrinsic, bipartite kinase activity of TAF(II)250. Here, we report that Rb is able to inhibit the kinase activity of immunopurified and gel-purified recombinant TAF(II)250. Rb inhibits the autophosphorylation of TAF(II)250 as well as its phosphorylation of the RAP74 subunit of TFIIF in a dose-responsive manner. Inhibition of TAF(II)250 kinase activity involves the Rb pocket (amino acids 379 to 928) but not its amino terminus. In addition, Rb appears to specifically inhibit the amino-terminal kinase domain of TAF(II)250 through a direct protein- protein interaction. We further demonstrate that two different tumor-derived Rb pocket mutants, C706F and Δex22, are functionally defective for kinase inhibition, even though they are able to bind the amino terminus of TAF(II)250. Our results suggest a novel mechanism of transcriptional regulation by Rb, involving direct interaction with TAF(II)250 and inhibition of its ability to phosphorylate itself, RAP74, and possibly other targets.