Histone acetylation plays a pivotal role in transcriptional regulation, and ATP-dependent nucleosome remodeling activity is required for optimal transcription from chromatin. While these two activities have been well characterized, how they are coordinated remains to be determined. We discovered ATP-dependent histone H2A acetylation activity in Drosophila nuclear extracts. This activity was column purified and demonstrated to be composed of the enzymatic activities of CREB-binding protein (CBP) and SMARCAD1, which belongs to the Etl1 subfamily of the Snf2 family of helicase-related proteins. SMARCAD1 enhanced acetylation by CBP of H2A K5 and K8 in nucleosomes in an ATP-dependent fashion. Expression array analysis of S2 cells having ectopically expressed SMARCAD1 revealed up-regulated genes. Using native genome templates of these up-regulated genes, we found that SMARCAD1 activates their transcription in vitro. Knockdown analysis of SMARCAD1 and CBP indicated overlapping gene control, and ChIP-seq analysis of these commonly controlled genes showed that CBP is recruited to the promoter prior to SMARCAD1. Moreover, Drosophila genetic experiments demonstrated interaction between SMARCAD1/Etl1 and CBP/nej during development. The interplay between the remodeling activity of SMARCAD1 and histone acetylation by CBP sheds light on the function of chromatin and the genome-integrity network.