Efficient transcription of SV40 early genes requires transcription factor Sp1. Here, we report that SV40 infection induces Sp1 phosphorylation. While characterizing this modification, we discovered that Sp1 becomes quantitatively phosphorylated in an in vitro transcription extract. Multiple processive phosphorylation of Sp1 depends on binding of Sp1 to GC box-containing DNA. Cell fractionation and column chromatography reveal that the Sp1 kinase is a nuclear DNA binding protein that corresponds to a previously identified DNA-dependent protein kinase. Because only some trans-activators are phosphorylated by this kinase, Sp1 belongs to a specific subgroup of factors that are phosphorylated upon binding to promoter sequences. Finally, efficient phosphorylation of Sp1 requires both a functional DNA binding domain and a region containing the transcriptional activation domains. Coupling of phosphorylation to DNA binding may represent a novel mechanism for regulating transcriptional initiation.