The coactivator function of cAMP-responsive element-binding protein (CREB)-binding protein (CBP) is partly caused by its histone acetyltransferase activity. However, it has become increasingly clear that CBP acetylates both histones and non-histone proteins, many of which are transcription factors. Here we investigate the role of CBP acetylase activity in CREB-mediated gene expression. We show that CREB is acetylated within the cell and that in vitro, CREB is acetylated by CBP, but not by another acetylase, p300/CBP-associated factor. The acetylation sites within CREB were mapped to three lysines within the CREB activation domain. Although inhibition of histone deacetylase activity results in an increase of CREB- or CBP-mediated gene expression, mutation of all three putative acetylation sites in the CREB activation domain markedly enhances the ability of CREB to activate a cAMP-responsive element-dependent reporter gene. Furthermore, these CREB lysine mutations do not increase interaction with the CRE or CBP. These data suggest that the transactivation potential of CREB may be modulated through acetylation by CBP. We propose that in addition to its functions as a bridging molecule and histone acetyltransferase, the ability of CBP to acetylate CREB may play a key role in modulating CREB-mediated gene expression.