Acetylation of histones by p300/CBP and PCAF is considered to be a critical step in transcriptional regulation. In order to understand the role of cellular activities that modulate histone acetylation and transcription, we have purified and characterized a multiprotein cellular complex that potently inhibits the histone acetyltransferase activity of p300/CBP and PCAF. We have mapped a novel acetyltransferase-inhibitory domain of this INHAT (inhibitor of acetyltransferases) complex that binds to histones and masks them from being acetyltransferase substrates. Endogenous INHAT subunits, which include the Set/TAF-Ibeta oncoprotein, associate with chromatin in vivo and can block coactivatormediated transcription when transfected in cells. We propose that histone masking by INHAT plays a regulatory role in chromatin modification and serves as a novel mechanism of transcriptional regulation.

Histone acetylation by p300/CBP and PCAF coactivators is considered to be a key mechanism of chromatin modification and transcriptional regulation. A multiprotein cellular complex, INHAT (inhibitor of acetyltransferases), containing the Set/TAF-I␤ oncoprotein and pp32 strongly inhibits the HAT activity of p300/CBP and PCAF by histone masking. Here we report that the INHAT complex and its subunits have overlapping but distinct HAT inhibitory and histone binding characteristics. We provide evidence suggesting that the histone binding and INHAT activity of pp32 can be regulated by its physical association with other INHAT subunits. In vivo colocalization and transfection studies show that pp32 INHAT domains are responsible for histone binding, HAT inhibitory activity, and repression of transcription. We propose that INHAT and its subunits may function by modulating histone acetyltransferases through a histone-masking mechanism and may play important regulatory roles in the establishment and maintenance of the newly proposed "histone code" of chromatin.