Fli1, a member of Ets transcriptional factors, has been shown to be a negative regulator of collagen gene expression in dermal fibroblasts. Although Fli1 down-regulation is implicated in pathological matrix remodeling such as cutaneous fibrosis in scleroderma, very little is known about the post-translational mechanisms regulating Fli1 function. The aim of this study was to investigate the role of acetylation, one of the main post-translational regulatory mechanisms, in regulating Fli1 activity. We initially demonstrated that Fli1 is acetylated by transforming growth factor (TGF)-beta1 in dermal fibroblasts. An in vivo acetylation assay using 293T cells revealed that Fli1 is mainly acetylated by the histone acetyltransferase activity of p300/CBP-associated factor (PCAF) at lysine 380. Acetylation of Fli1 resulted in a decreased stability of Fli1 protein. More importantly, reduced binding of acetylated Fli1 to the human alpha2(I) collagen (COL1A2) promoter was observed in DNA affinity precipitation and chromatin immunoprecipitation. Conversely, a Fli1 K380R mutant that is resistant to acetylation by PCAF showed increased DNA binding ability. Furthermore, PCAF overexpression reversed the inhibitory effect of Fli1 on TGF-beta1-mediated COL1A2 promoter activity. In contrast, the Fli1 K380R mutant had a greater inhibitory effect on TGF-beta1-induced COL1A2 promoter activity than wild-type Fli1, and PCAF failed to reverse this effect. These results indicate that PCAF-dependent acetylation of lysine 380 abrogates repressor function of Fli1 with respect to collagen gene expression. Furthermore, these data strongly suggest that the TGF-beta-dependent acetylation of Fli1 may represent the principal mechanism responsible for the TGF-beta-induced dissociation of Fli1 from the collagen promoter.