The ligand-bound thyroid hormone receptor (TR) is known to repress via a negative IRE (nTRE) the expression of E2F1, a key transcription factor that controls the G1/S phase transition. Alien has been identified as a novel interacting factor of E2F1 and acts as a corepressor of E2F1. The detailed molecular mechanism by which Alien inhibits E2F1 gene expression remains unclear. Here, we report that the histone H3 lysine 9 (H3K9) methyltransferase (HMT) ESET is an integral component of the corepressor Alien complex and the Alien/ESET complex is recruited to both sites, the E2F1 and the nTRE site of the E2F1 gene while the recruitment to the negative thyroid hormone response element (nTRE) is induced by the ligand-bound TR beta 1 within the E2F1 gene promoter. We show that, overexpression of ESET promotes, whereas knockdown of ESET releases, the inhibition of TR beta 1-regulated gene transcription upon T3 stimulation; and H3K9 methylation is required for TR beta 1-repressed transcription. Furthermore, depletion of ESET impairs thyroid hormone-repressed proliferation as well as the G1/S transition of the cell cycle. Taken together, our data indicate that ESET is involved in TR beta 1-mediated transcription repression and provide a molecular basis of thyroid hormone-induced repression of proliferation. (C) 2011 Elsevier Inc. All rights reserved.