Inhibin is a dimeric peptide hormone produced in ovarian granulosa cells that suppresses FSH synthesis and secretion in the pituitary. Expression of inhibin and subunit genes in the rodent ovary is positively regulated by FSH and negatively regulated following the preovulatory LH surge. We have investigated the role of the transcription factor CCAAT/enhancer binding protein (C/EBP) in repressing the inhibin subunit gene. C/EBP knockout mice fail to appropriately down-regulate inhibin subunit mRNA levels following treatment with hCG, indicating that C/EBP may function to repress inhibin gene expression. The expression and regulation of C/EBP was examined in the rodent ovary, and these studies show that C/EBP is expressed in the ovary and in granulosa cells and is induced in response to hCG. Transient cotransfections with an inhibin promoter-luciferase reporter in a mouse granulosa cell line, GRMO2 cells, show that C/EBP is capable of repressing both basal and forskolin-stimulated inhibin gene promoter activity. An upstream binding site for C/EBP in the inhibin subunit promoter was identified by electrophoretic mobility shift assays, which, when mutated, results in elevated inhibin promoter activity. However, C/EBP also represses shorter promoter constructs lacking this site, and this component of repression is dependent on the more proximal promoter cAMP response element (CRE). EMSA assays show that C/EBP effectively competes with CREB for binding to this atypical CRE. Thus, there are two distinct mechanisms by which C/EBP represses inhibin subunit gene expression in ovarian granulosa cells.