The role of Groucho/transducin-like Enhancer of split (Gro/TLE) family members as corepressors of transcription is well documented. TLX1 is a homeodomain transcription factor involved in splenogenesis and neuron formation, and its aberrant expression gives rise to T-cell acute lymphoblastic leukemia. We demonstrate by glutathione-S-transferase pull-down assays, in vivo biotinylation tagging and confocal laser microscopy that TLX1 interacts with TLE1 via an Eh1-like motif. Paradoxically, we found that this motif is essential for optimal transcriptional activation of two TLX1 target genes, Aldh1a1 and Fhl1. Using a well characterized target of the Hairy/Enhancer of split 1 (HES1).TLE1 repressor complex, the ASCL1 gene, we show that TLX1 counteraction of ASCL1 repression by HES1 in SK-N-BE(2) neuroblastoma cells is associated with dismissal of TLE1 from the ASCL1 promoter and requires the Eh1-like motif for maximal effect. Collectively, these results indicate that TLX1-mediated target gene activation can occur in part via derepression strategies involving Gro/TLE corepressors.