zfh-1 is a zinc finger/homeodomain transcriptional repressor in Drosophila that regulates differentiation of muscle and gonadal cells and is also expressed in the central nervous system (CNS). Binding sites for zfh-1 overlap with those for snail, and like snail, it recruits the corepressor CtBP-1. The protein ZEB-1 appears to be a vertebrate homologue of zfh-1 and is expressed in several tissues including muscle, CNS, and T lymphocytes, and during skeletal differentiation. Mutation of the ZEB-1 gene led to a severe T cell phenotype and skeletal defects but, interestingly, no defects were evident in other ZEB-1-expressing tissues. These results suggested that another ZEB-1-related factor may compensate for the loss of ZEB-1 in other tissues. Here, we characterize such a ZEB-1-related protein, which we have termed as ZEB-2. The overall organization of ZEB-2 is similar to ZEB-1 and zfh-1 and it has similar biochemical properties: it binds E boxes and interacts with CtBP-1 to repress transcription. However, there are also differences between ZEB-1 and ZEB-2, both in activity and tissue distribution. Whereas ZEB-1 and ZEB-2 overlap in skeletal muscle and CNS (providing an explanation for why mutation of ZEB-1 alone has little effect in these tissues), they show a different pattern of expression in lymphoid cells. ZEB-1, but not ZEB-2, is expressed in T cells from the thymus ZEB-2 appears to be expressed on splenic B cells. Additionally, ZEB-2 inhibits a wider spectrum of transcription factors than ZEB-1.