Transforming growth factor-β1 (TGF-β1)-induced expression of plasminogen activator inhibitor-1 (PAI-1) and p21 in renal mesangial cells (MCs) plays a major role in glomerulosclerosis and hypertrophy, key events in the pathogenesis of diabetic nephropathy. However, the involvement of histone acetyl transferases (HATs) and histone deacetylases (HDACs) that regulate epigenetic histone lysine acetylation, and their interaction with TGF-β1-responsive transcription factors, are not clear. We evaluated the roles of histone acetylation, specific HATs, and HDACs in TGF-β1-induced gene expression in rat mesangial cells (RMCs) and in glomeruli from diabetic mice. Overexpression of HATs CREB binding protein (CBP) or p300, but not p300/CBP-activating factor, significantly enhanced TGF-β1-induced PAI-1 and p21 mRNA levels as well as transactivation of their promoters in RMCs. Conversely, they were significantly attenuated by HAT domain mutants of CBP and p300 or overexpression of HDAC-1 and HDAC-5. Chromatin immunoprecipitation assays showed that TGF-β1 treatment led to a time-dependent enrichment of histone H3-lysine9/14-acetylation (H3K9/14Ac) and p300/CBP occupancies around Smad and Sp1 binding sites at the PAI-1 and p21 promoters. TGF-β1 also enhanced the interaction of p300 with Smad2/3 and Sp1 and increased Smad2/3 acetylation. High glucose-treated RMCs exhibited increased PAI-1 and p21 levels, and promoter H3K9/14Ac, which were blocked by TGF-β1 antibodies. Furthermore, increased PAI-1 and p21 expression was associated with elevated promoter H3K9/14Ac levels in glomeruli from diabetic mice. Thus TGF-β1-induced PAI-1 and p21 expression involves interaction of p300/CBP with Smads and Sp1, and increased promoter access via p300/CBP-induced H3K9/14Ac. This in turn can augment glomerular dysfunction linked to diabetic nephropathy.