The yeast Spt10p activator is a putative histone acetyltransferase (HAT) possessing a sequence-specific DNA-binding domain (DBD) which binds to the upstream activation sequences (UAS elements) in the histone gene promoters. Spt10p binds to a pair of histone UAS elements with extreme positive cooperativity. The molecular basis of this cooperativity was addressed. Spt10p (640 residues) is an elongated dimer, but the isolated DBD (residues 283-396) is a monomer and binds non-cooperatively to DNA. A Spt10p fragment comprising the N-terminal domain (NTD), HAT domain and DBD (residues 1-396) binds cooperatively and is a dimer, whereas an overlapping Spt10p fragment comprising the DBD and C-terminal domains (residues 283-640) binds non-cooperatively and is a monomer. These observations imply that cooperative binding requires dimerization. The isolated NTD (residues 1-98) is a dimer and is responsible for dimerization. We propose that cooperativity involves a conformational change in the Spt10p dimer which facilitates the simultaneous recognition of two UAS elements. In vivo, deletion of the NTD results in poor growth, but does not prevent the binding at the HTA1 promoter, suggesting that dimerization is biologically important. Residues 1-396 are sufficient for normal growth, indicating that the critical functions of Spt10p reside in the N-terminal domains.