ABSTRACT: The mammalian small ubiquitin-like modifiers (SUMOs) are actively involved in regulating differentiation of different cell types. However, the functional differences between SUMO isoforms and their mechanisms of action remain largely unknown. Using the ocular lens as a model system, we demonstrate that different SUMOs display distinct functions in regulating differentiation of epithelial cells into fiber cells. During lens differentiation, SUMO1 and SUMO2/3 displayed different expression, localization, and targets, suggesting differential functions. Indeed, overexpression of SUMO2/3, but not SUMO1, inhibited basic (b) FGF-induced cell differentiation. In contrast, knockdown of SUMO1, but not SUMO2/3, also inhibited bFGF action. Mechanistically, specificity protein 1 (Sp1), a major transcription factor that controls expression of lens-specific genes such as ?-crystallins, was positively regulated by SUMO1 but negatively regulated by SUMO2. SUMO2 was found to inhibit Sp1 functions through several mechanisms: sumoylating it at K683 to attenuate DNA binding, and at K16 to increase its turnover. SUMO2 also interfered with the interaction between Sp1 and the coactivator, p300, and recruited a repressor, Sp3 to ?-crystallin gene promoters, to negatively regulate their expression. Thus, stable SUMO1, but diminishing SUMO2/3, during lens development is necessary for normal lens differentiation. In support of this conclusion, SUMO1 and Sp1 formed complexes during early and later stages of lens development. In contrast, an interaction between SUMO2/3 and Sp1 was detected only during the initial lens vesicle stage. Together, our results establish distinct roles of different SUMO isoforms and demonstrate for the first time, to our knowledge, that Sp1 acts as a major transcription factor target for SUMO control of cell differentiation.