The cytokine interleukin‐6 (IL‐6) plays key roles in the immune and inflammatory responses, acute‐phase reaction and hematopoiesis. Such biological actions of IL‐6 are characterised by both the activation and the inhibition of gene transcription. Unfortunately, in contrast to gene activation, the mechanism by which IL‐6 suppresses transcription remains largely unclear. We have, therefore, investigated this aspect using the Xenopus laevis CCAAT/enhancer binding protein‐α (C/EBPα) gene promoter as a model. We show by transient transfection assays of various promoter–luciferase DNA constructs into hepatoma cells that a C/EBP recognition sequence in the proximal promoter region is essential for the IL‐6‐mediated repression. Electrophoretic mobility shift assays showed that C/EBPα was the major protein that bound to this site and, consistent with its expression pattern, the binding was reduced when the cells were exposed to IL‐6. Co‐transfection assays revealed for the first time that the ability of C/EBPα, but not C/EBPβ or Sp1, to transactivate the promoter was decreased dramatically when the cells were incubated with IL‐6. These studies, therefore, identify a novel mechanism for IL‐6‐mediated repression of gene transcription that involves a reduction in C/EBPα‐mediated activation.