The alpha-fetoprotein (AFP) gene is highly activated in fetal liver but is dramatically repressed shortly after birth. The mechanisms that underlie AFP transcriptional repression in postpartum liver are not well understood. AFP enhancer, repressor region, and promoter are implicated to be involved in AFP postnatal repression, but the major transcriptional repressor remains undefined. We previously identified a zinc finger protein gene ZBTB20. To determine its physiological functions in vivo, we have generated hepatocyte-specific ZBTB20 knockout mice by the Cre/loxP approach and demonstrated here that ZBTB20 ablation in liver led to dramatic derepression of the AFP gene in entire liver throughout adult life, although the hepatocytes were normally under nonproliferating status. Furthermore, we found that ZBTB20 was a transcriptional repressor capable of specifically inhibiting AFP promoter-driven transcriptional activity. Liver chromatin immunoprecipitation and mobility shift assays showed that ZBTB20 bound to AFP promoter directly. ZBTB20 was developmentally activated in liver after birth and inversely correlated with its AFP gene expression, suggesting that activated ZBTB20 expression in liver mediated AFP gene repression. Our data point to ZBTB20 as a key regulator governing AFP gene transcription and postulate a new model for the postnatal gene repression of AFP in liver.