Multiple transcription factors, including members of the nuclear receptor family harbor one or more copies of a short regulatory motif that limits synergistic transactivation in a context-dependent manner. These Synergy Control or SC motifs exert their effects by serving as sites for post-translational modification by Small Ubiquitin like Modifier (SUMO) proteins. By analyzing the requirements for both synergy control and SUMOylation in the glucocorticoid receptor (GR), we find that an intact ligand-binding domain (LBD) and an engaged DNA binding domain (DBD) dimerization interface are necessary for effective synergy control. However, these features, which promote stable assembly of GR-DNA complexes, are required downstream of SUMOylation since their disruption or deletion does not interfere with SUMO modification. Remarkably, in the absence of these features, sensitivity to the effects of SUMOylation can be restored simply by stabilization of DNA interactions through a heterologous DNA binding domain. The data indicate that stable interaction with DNA is an important prerequisite for SUMO-dependent transcriptional inhibition. Analysis of genomic regions occupied by GR indicates that the effects of SC motif SUMOylation are most evident at multiple, near-ideal GR binding sites and that SUMOylation selectively affects the induction of linked endogenous genes. Although the SUMO-binding protein DAXX has been proposed to mediate the inhibitory effects of GR SUMOylation, we find that inhibition by DAXX is independent of GR SUMOylation. Furthermore, neither expression nor knockdown of DAXX influences SUMO effects on GR. We therefore propose that stable binding of GR to multiple sites on DNA allows for the SUMO-dependent recruitment of inhibitory factors distinct from DAXX.