PLAG1 (pleomorphic adenoma gene 1) and PLAGL2 (PLAG-like 2) are oncogenes involved in various malignancies. Thus the study of their regulatory mechanisms may lead to identification of novel therapeutic targets. In this study, we provide supporting evidence that sumoylation and acetylation regulate functions of PLAG1 and PLAGL2. A conserved transcriptional repression domain exists in both PLAG1 and PLAGL2, whose activity depends on the presence of three sumoylation motifs and an intact sumoylation pathway. In vivo sumoylation assays confirmed that lysines 244, 263, and 353 of PLAG1 and lysines 250, 269, and 356 of PLAGL2 are indeed sumoylation sites. Further study showed that sumoylation inhibits PLAG1-induced IGF-II expression in reporter assays. The repression mediated by sumoylation may be partially explained by its effect on the cellular localization of PLAG1 and PLAGL2, because sumoylation-deficient but not wild-type PLAG1 and PLAGL2 concentrate in the nucleolus. PLAG1 and PLAGL2 are also regulated by acetylation. They are acetylated and activated by p300 and deacetylated and repressed by HDAC7. Interestingly, the sumoylation-deficient mutant of PLAGL2 is acetylated at a lower level than its wild-type counterpart, suggesting that some of the lysine residues may be targets for both modifications. Finally, mutation of three lysine residues in sumoylation motifs significantly impairs the transformation ability of PLAG1 and PLAGL2, suggesting the essential roles of these sites in the oncogenic potential of PLAG proteins. Taken together, the activities of PLAG1 and PLAGL2 are tightly modulated by both sumoylation and acetylation, which have opposite effects on their transactivation. To our knowledge, this is the first demonstration that oncoproteins can be regulated by both sumoylation and acetylation.