Over the past few years, small ubiquitin-like modifier (SUMO) modification has emerged as an important regulator of diverse pathways and activities including protein localization and transcriptional regulation. We identified a consensus sumoylation motif (IKEE), located within the N-terminal activation domain of the ATF7 transcription factor and thus investigated the role of this modification. ATF7 is a ubiquitously expressed transcription factor, homologous to ATF2, that binds to CRE elements within specific promoters. This protein is able to heterodimerize with Jun or Fos proteins and its transcriptional activity is mediated by interaction with TAF12, a subunit of the general transcription factor TFIID. In the present article, we demonstrate that ATF7 is sumoylated in vitro (using RanBP2 as a E3-specific ligase) and in vivo. Moreover, we show that ATF7 sumoylation affects its intranuclear localization by delaying its entry into the nucleus. Furthermore, SUMO conjugation inhibits ATF7 transactivation activity by (i) impairing its association with TAF12 and (ii) blocking its binding-to-specific sequences within target promoters.