The family of NFAT (nuclear factor of activated T-cells) transcription factors plays an important role in cytokine gene regulation. In peripheral T-cells NFATc1 and -c2 are predominantly expressed. Because of different promoter and poly(A) site usage as well as alternative splicing events, NFATc1 is synthesized in multiple isoforms. The highly inducible NFATc1/A contains a relatively short C terminus, whereas the longer, constitutively expressed isoform NFATc1/C spans an extra C-terminal peptide of 246 amino acids. Interestingly, this NFATc1/C-specific terminus can be highly sumoylated. Upon sumoylation, NFATc1/C, but not the unsumoylated NFATc1/A, translocates to promyelocytic leukemia nuclear bodies. This leads to interaction with histone deacetylases followed by deacetylation of histones, which in turn induces transcriptionally inactive chromatin. As a consequence, expression of the NFATc1 target gene interleukin-2 is suppressed. These findings demonstrate that the modification by SUMO (small ubiquitin-like modifier) converts NFATc1 from an activator to a site-specific transcriptional repressor, revealing a novel regulatory mechanism for NFATc1 function.