Sequence-specific DNA binding transcriptional repressor. Represses target gene transcription by recruiting HDAC1 and HDAC2 histone deacetylases. Acts as a specific transcriptional repressor for PTCH1 during embryonic development. Required for osteoblast differentiation and sonic hedgehog/SHH signaling response. Binds to the consensus site 5'-GCGCCC-3' in the promoter of PTCH1. Interacts (via KRAB domain) with HDAC2; the interaction is direct. Interacts (via KRAB domain) with HDAC1. Expressed in brain, heart, lung, thymus, spleen, lymph node, liver, kidney, muscle, testis, ovary, skin and uterus. Expressed in limb mesenchyme at 10.5 dpc. Expressed in tooth, submandibular glands, thymus, thyroid, vibrissa follicles at 14.5 dpc. The KRAB domain is necessary for its repressive activity.