Many proteins that are important for regulated gene expression--including promoter-specific transcription factors, cofactors and chromatin-modifying enzymes--have been found to be reversibly modified by the small ubiquitin-related modifier, SUMO. Post-translational modification by SUMO has diverse effects on substrate activity, but, in most cases described to date, SUMOylation of transcriptional regulators correlates with inhibition of transcription. Recent studies provide new insights into the mechanisms by which SUMOylation regulates transcription and suggest that one consequence of SUMOylation is to promote the interaction of transcription factors with co-repressors. Histone deacetylase co-repressors have been found to function as substrates, effectors, and regulators of SUMOylation, suggesting that complex crosstalk between acetylation and SUMOylation is important for gene regulation.