Small ubiquitin-like modifier (SUMO) is a protein moiety that is ligated to lysine residues on a variety of target proteins. Many known SUMO substrates are transcription factors or coregulators of transcription, and in most cases, modification with SUMO leads to the attenuation of transcriptional activation. We have examined basic Kruppel-like factor/Kruppel-like factor 3 (BKLF), a zinc finger transcription factor that is known to function as a potent transcriptional repressor. We show that BKLF recruits the E2 SUMO-conjugating enzyme Ubc9 and can be modified by the addition of SUMO-1 in vitro and in vivo. The SUMO E3 ligases PIAS1, PIASgamma, PIASxalpha, and PIASxbeta but not Pc2 enhance the sumoylation of BKLF. Site-directed mutagenesis identified two lysines (K10 and K197) of BKLF as the sumoylation sites. Sumoylation does not detectably affect DNA binding by BKLF, but mutation of the sumoylation sites reduces transcriptional repression activity. Most interestingly, when mutations preventing sumoylation are combined with an additional mutation that eliminates contact with the C-terminal binding protein (CtBP) corepressor, BKLF becomes an activator of transcription. These results link SUMO modification to transcriptional repression and demonstrate that both recruitment of CtBP and sumoylation are required for full repression by BKLF.