We have isolated from a crude Hela cell cofactor fraction (USA) a novel positive cofactor that cooperates with the general transcription machinery to effect efficient stimulation of transcription by GAL4-AH, a derivative of the Saccharomyces cerevisiae regulatory factor GAL4. PC2 was shown to be a 500-kDa protein complex and to be functionally and biochemically distinct from native TFIID and previously identified cofactors. In the presence of native TFIID and other general factors, PC2 was necessary and sufficient for activation by GAL4-AH. Cofactor function was specific for transcriptional activation domains of GAL4-AH. The repressor histone H1 further potentiated but was not required for activation of transcription by GAL4-AH. On the basis of the observation that PC2 exerts entirely positive effects on transcription, we propose a model in which PC2 increases the activity of the preinitiation complex in the presence of an activator, thereby establishing a specific pathway during activation of RNA polymerase II.