An HSV virion component, Vmw65, interacts with cellular transcription factors to transactivate TAATGARAT-containing viral genes and some cellular genes containing the related octamer element. We show that the octamer-containing histone H2B promoter can be trans-activated by transfection of Vmw65 but not by viral infection. The induction of H2B transcription by Vmw65 can be abolished by co-transfection of excess amounts of either a TAATGARAT element or a Vmw65 responsive octamer element. This effect cannot be overcome by addition of increasing amounts of Vmw65. The H2B promoter and TAATGARAT-containing viral promoters therefore compete for limiting cellular factors required for induction by Vmw65 resulting in repression of the H2B gene during lytic infection. The competitive effect of TAATGARAT elements on the H2B gene is not observed in the absence of Vmw65, but can be produced in the presence of a truncated form of Vmw65 lacking the acidic tail required for transcriptional activation. Hence a domain of Vmw65 distinct from that involved in transcriptional induction interacts with cellular octamer binding proteins favouring binding to the TAATGARAT motif.