Our understanding of eukaryotic transcriptional activation mechanisms has been hampered by an inability to identify the direct in vivo targets of activator proteins, primarily because of lack of appropriate experimental methods. To circumvent this problem, we have developed a fluorescence resonance energy transfer (FRET) assay to monitor interactions with transcriptional activation domains in living cells. We use this method to show that the Tra1 subunit of the SAGA (Spt/Ada/Gcn5/acetyltransferase) complex is the direct in vivo target of the yeast activator Gal4. Chromatin-immunoprecipitation experiments demonstrate that the Gal4-Tra1 interaction is required for recruitment of SAGA to the upstream activating sequence (UAS), and SAGA, in turn, recruits the Mediator complex to the UAS. The UAS-bound Mediator is required for recruitment of the general transcription factors to the core promoter. Thus, our results identify the in vivo target of an activator and show how the activator-target interaction leads to transcriptional stimulation. The FRET assay we describe is a general method that can be used to identify the in vivo targets of other activators. Transcription initiation by RNA polymerase II involves the assembly of general transcription factors (GTFs) on the core promoter to form a preinitiation complex (PIC). A variety of studies indicate that promoter-specific activator proteins (activators) work, at least in part, by increasing PIC formation (Orphanides et al. 1996;Roeder 1996;Ptashne and Gann 1997;. Activator-mediated stimulation of PIC assembly is believed to result from a direct interaction between the activation domain (AD) and one or more components of the transcription machinery, termed the "target." The unambiguous identification of the direct in vivo targets of activators has been a major challenge in the field.Transcriptional induction of genes involved in galactose utilization (GAL genes) has been a model experimental system for studying transcriptional activation mechanisms. The well-characterized acidic activator Gal4 is responsible for the transcriptional stimulation of GAL genes, such as GAL1, which contain Gal4-binding sites in their promoters (Johnston 1987;Johnston and Carlson 1992;Dudley et al. 1999). A variety of transcriptional components have been proposed to be the target of Gal4 including TBP (Melcher and Johnston 1995;Wu et al. 1996), TFIIB (Wu et al. 1996), Srb4 (Koh et al. 1998Park et al. 2000), Gal11 (Jeong et al. 2001), the Swi/Snf complex (Neely et al. 2002), and the SAGA (Spt/Ada/ Gcn5/acetyltransferase) complex (Bhaumik and Green 2001;Brown et al. 2001;Larschan and Winston 2001). These proposals are based on either in vitro protein interaction studies or inferences from various indirect in vivo experiments, and to date there is no definitive evidence that Gal4 directly interacts with any of these putative targets in vivo. The major obstacle has been the lack of an experimental strategy to measure direct interactions with transcriptional ADs in vivo.The development of spectra...