Ku antigen is an abundant nuclear protein with multiple functions that depend mainly on Ku's prolific and highly verstatile interactions with DNA. We have shown previously that the direct binding of Ku in vitro to negative regulatory element 1 (NRE1), a transcriptional regulatory element in the long terminal repeat of mouse mammary tumour virus, correlates with the regulation of viral transcription by Ku. In this study, we have sought to explore the interaction of Ku with NRE1 in vivo in yeast one-hybrid experiments. Unexpectedly, we observed that human Ku70 carrying a transcriptional activation domain from the yeast Gal4 protein induced transcription of yeast reporter genes pleiotrophically, independent of NRE1, promoter, reporter gene and chromosomal location. Ku80 with the same activation domain had no effect on transcription when expressed alone, but reconstituted activation when co-expressed with native human Ku70. The requirements for transcriptional activation by Ku-Gal4 activation domain proteins correlated with previous descriptions of the requirements for DNA sequence-independent DNA binding by Ku, but were distinct from determinants for DNA-end binding by a truncated Ku heterodimer determined recently by crystallography. These results suggest a preferential targeting of Ku to transcriptionally active chromatin that indicate a possible function for Ku within the RNA polymerase II holoenzyme.