The human ABIN-2 was originally identified as an A20-associating cytosolic protein to block NF-kappaB activation induced by various stimuli. Here we report that ABIN-2 has the potential to enter the nucleus and plays a role in mediating transcriptional activation in both yeast and mammalian cells. The Gal4BD-ABIN-2 fusion protein is able to drive the expression of the GAL4-responsive reporter gene in yeast efficiently without the need of the Gal4p activation domain, suggesting that ABIN-2 functions as a transcriptional coactivator and facilitates transcription in yeast. In contrast to the activity in yeast, however, only the C-terminal fragment of ABIN-2 exerts the transactivating activity in mammalian cells but not the full-length ABIN-2 protein. This observation has led to the identification of the N-terminal 195 amino acids of ABIN-2 as a regulatory domain, which retains the full-length ABIN-2 in the cytoplasm of mammalian cells and thus cannot transactivate. We have also found that BAF60a, a component of chromatin-remodeling complex, interacts with ABIN-2 by the yeast two-hybrid analysis. Together, our results suggest that the nuclear ABIN-2 defines a novel transcriptional coactivator and acts presumably by recruiting a chromatin-remodeling complex to the site of the target gene.