Negative cofactor 2 (NC2) is a dimeric histone-fold complex that represses RNA polymerase II transcription through binding to TATA-box-binding protein (TBP) and inhibition of the general transcription factors TFIIA and TFIIB. Here we study molecular mechanisms of repression by human NC2 in vivo in yeast. Yeast NC2 genes are essential and can be exchanged with human NC2. The physiologically relevant regions of NC2 have been determined and shown to match the histone-fold dimerization motif. A suppressor screen based upon limiting concentrations of NC2beta yielded a cold-sensitive mutant in the yeast TFIIA subunit Toa1. The single point mutation in Toa1 alleviates the requirement for both subunits of NC2. Biochemical characterization indicated that mutant (mt)-Toa1 dimerizes well with Toa2; it supports specific recognition of the TATA box by TBP but forms less stable TBP-TFIIA-DNA complexes. Wild-type but not the mt-Toa1 can relieve NC2 effects in purified transcription systems. These data provide evidence for a dimeric NC2 complex that is in an equilibrium with TFIIA after the initial binding of TBP to promoter TATA boxes.