Histone H1 promotes the generation of a condensed, transcriptionally inactive, higher-order chromatin structure. Consequently, histone H1 activity must be antagonized in order to convert chromatin to a transcriptionally competent, more extended structure. Using simian virus 40 minichromosomes as a model system, we now demonstrate that the nonhistone chromosomal protein HMG-14, which is known to preferentially associate with active chromatin, completely alleviates histone H1-mediated inhibition of transcription by RNA polymerase II. HMG-14 also partially disrupts histone H1-dependent compaction of chromatin. Both the transcriptional enhancement and chromatin-unfolding activities of HMG-14 are mediated through its acidic, C-terminal region. Strikingly, transcriptional and structural activities of HMG-14 are maintained upon replacement of the C-terminal fragment by acidic regions from either GAL4 or HMG-2. These data support the model that the acidic C terminus of HMG-14 is involved in unfolding higher-order chromatin structure to facilitate transcriptional activation of mammalian genes.In mammalian cells, genomic DNA is highly condensed, being organized in the nucleoprotein complex constituting chromatin (65,70). The packaging of genomic DNA into chromatin can inhibit gene expression in multiple ways: restricting the access of transcription factors to their promoter elements, blocking assembly and initiation by the general transcriptional machinery, and inhibiting elongation by the RNA polymerase. As a corollary, activation of transcription requires remodeling of the chromatin structure of the gene in order to relieve the repressive effects of chromatin on transcription (34,38,45,71,72).The building block of chromatin is the nucleosome, consisting of DNA wrapped twice around a histone octamer comprising the core histones H2A, H2B, H3, and H4. A linker histone, generally histone H1, interacts with DNA at several sites simultaneously (3, 51, 55, 58): (i) with DNA at or close to the entry and exit points of the nucleosome, (ii) with nucleosomal DNA over the dyad axis, after one wrap around the octamer, and (iii) with linker DNA between adjacent nucleosomal core particles. Within the interphase nucleus of higher eukaryotic cells, the linear array of nucleosomes is folded into a higherorder structure, called the 30-nm chromatin fiber (65, 70). Histone H1 plays a key role in the formation of such a higherorder chromatin structure (4, 37, 52, 59, 60).Biochemical and genetic studies have identified two distinct systems capable of remodeling the nucleosome structure for transcriptional activation. The multisubunit SWI/SNF complex, which is conserved from yeasts to humans (49, 69), can perturb the structure of a nucleosome in an ATP-dependent manner (15,29,35). This promotes the binding in vitro of either specific or general transcription factors, such as GAL4 and TBP, to their sites on nucleosomal DNA. A distinct nucleosome-remodeling factor (NURF), originally purified from Drosophila embryo extracts (63), is also capable ...