The lack of direct targets for TATA-binding protein (TBP)-like factors (TLFs) confounds the understanding of their role in gene expression. Here we report that human TLF (also called TBP-related factor 2 [TRF2]) activates a number of different genes, including the neurofibromatosis type 1 (NF1) gene. The overexpression of TLF increases the amount of NF1 mRNA in cells. In vivo, TLF binds to and upregulates transcription from a fragment of the NF1 promoter. In vitro, purified TLF-TFIIA binds directly to the same NF1 promoter fragment that is required for TLF responsiveness in cells. Furthermore, targeted deletion of TLF in mice reduces NF1 levels. In contrast, TLF inhibits transcription driven by a fragment from the TATA-containing c-fos promoter by sequestering TFIIA. TBP affects the NF1 and c-fos promoters in a manner reciprocal to that of TLF, stimulating the c-fos promoter and inhibiting NF1 transcription. We conclude that TLF is a functional regulator of transcription with targets distinct from those of TBP