Drosophila Groucho, like its vertebrate Transducin-like Enhancer-of-split homologues, is a corepressor that silences gene expression in numerous developmental settings. Groucho itself does not bind DNA but is recruited to target promoters by associating with a large number of DNA-binding negative transcriptional regulators. These repressors tether Groucho via short conserved polypeptide sequences, of which two have been defined. First, WRPW and related tetrapeptide motifs have been well characterized in several repressors. Second, a motif termed Engrailed homology 1 (eh1) has been found predominantly in homeodomain-containing transcription factors. Here we describe a yeast two-hybrid screen that uncovered physical interactions between Groucho and transcription factors, containing eh1 motifs, with different types of DNA-binding domains. We show that one of these, the zinc finger protein Odd-skipped, requires its eh1-like sequence for repressing specific target genes in segmentation. Comparison between diverse eh1 motifs reveals a bias for the phosphoacceptor amino acids serine and threonine at a fixed position, and a mutational analysis of Odd-skipped indicates that these residues are critical for efficient interactions with Groucho and for repression in vivo. Our data suggest that phosphorylation of these phosphomeric residues, if it occurs, will down-regulate Groucho binding and therefore repression, providing a mechanism for posttranslational control of Groucho-mediated repression.