The gene encoding INI1, a component of the mammalian SWI/SNF ATP-dependent chromatin remodeling enzymes, has been classified as a tumor suppressor in humans. Gene-targeting experiments confirmed that Ini1 also functions as a tumor suppressor in mice. Although Ini1-null mice are embryonic lethal, 15-30% of mice heterozygous for Ini1 presented with poorly differentiated tumors with variable rhabdoid features. All tumors examined showed loss of heterozygosity at the Ini1 locus. We report here that cells and tissues heterozygous for the Ini1 tumor suppressor express levels of Ini1 protein and message roughly equivalent to the levels observed in wild type counterparts. Compensation of Ini1 is mediated by an increase in the rate of transcription from the Ini1 promoter. Moreover, when Ini1 is expressed exogenously, transcription from the endogenous promoter is reduced, suggesting that Ini1 levels are tightly regulated. This is the first report describing transcriptional compensation for haploinsufficiency of a tumor suppressor gene.