  We provide a theory of dynamo ($\alpha$ effect) and momentum transport in
three-dimensional magnetohydrodynamics. For the first time, we show that the
$\alpha$ effect is severely reduced by the shear even in the absence of
magnetic field. The $\alpha$ effect is further suppressed by magnetic fields
well below equipartition (with the large-scale flow) with different scalings
depending on the relative strength of shear and magnetic field. The turbulent
viscosity is also found to be significantly reduced by shear and magnetic
fields, with positive value. These results suggest a crucial effect of shear
and magnetic field on dynamo quenching and momentum transport reduction, with
important implications for laboratory and astrophysical plasmas, in particular
for the dynamics of the Sun.
