X-box binding protein 1 (XBP-1) is a key regulator required for cellular unfolded protein response (UPR) and plasma cell differentiation. In addition, involvement of XBP-1 in host cell-virus interaction and transcriptional regulation of viruses, such as human T-lymphotropic virus type 1 (HTLV-1), has been revealed recently. Two XBP-1 isoforms, XBP-1U and XBP-1S, which share an identical N-terminal domain, are present in cells. XBP-1S is a transcription activator while XBP-1U is the inactive isoform. Although the transactivation domain of XBP-1S has been identified within the XBP-1S-specific C-terminus, molecular mechanism of the transcriptional activation by XBP-1S still remains unknown. Here we report the interaction between p300/CBP-associated factor (PCAF) and XBP-1S through the C-terminal domain of XBP-1S. No binding between XBP-1U and PCAF is detected. In a cell-based reporter assay, overexpression of PCAF further stimulates the XBP-1S-mediated cellular and HTLV-1 transcription while knockdown of PCAF exhibits the opposite effect. Expression of endogenous XBP-1S cellular target genes, such as BiP and CHOP, is significantly inhibited when PCAF is knocked down. Furthermore, PCAF is recruited to the promoters of XBP-1S target genes in vivo, in a XBP-1S-dependent manner. Collectively, our results demonstrate that PCAF mediates the XBP-1S-dependent transcription through the interaction with XBP-1S.