The hematopoietic transcription factor NF-E2 is an important regulator of erythroid and megakaryocytic gene expression. The transcription cofactor cAMP-response element-binding protein (CREB)-binding protein (CBP) has previously been implicated in mediating NF-E2 function. In this report, we examined the role of CBP, a coactivator with intrinsic acetyltransferase activity, in the regulation of NF-E2. We found that both the hematopoietic-specific subunit of NF-E2, p45, and the widely expressed small subunit, MafG, interact with CBP in vitro and in vivo. CBP acetylates MafG, but not p45, predominantly in the basic region of MafG. Immunoprecipitation experiments with anti-acetyl lysine antibodies demonstrate that MafG is acetylated in vivo in erythroid cells. Transfection experiments further show that CBP stimulates MafG acetylation in intact cells in an E1A-sensitive manner. Acetylation of MafG augments DNA binding activity of NF-E2, and mutations at the major acetylation sites markedly reduce DNA binding and transcriptional activation by NF-E2. Together, these results suggest that recruitment of CBP by NF-E2 to specific erythroid/megakaryocytic promoters might regulate transcription by at least two mechanisms involving both modification of chromatin structure and modulation of transcription factor activity.