Nuclear receptors have been postulated to regulate gene expression via their association with histone acetylase (HAT) or deacetylase complexes. We report that hormone induces dramatic hyperacetylation at endogenous target genes through the HAT activity of p300/CBP. Unexpectedly, this hyperacetylation is transient and coincides with attenuation of hormone-induced gene activation. In exploring the underlying mechanism, we found that the acetylase ACTR can be acetylated by p300/CBP. The acetylation neutralizes the positive charges of two lysine residues adjacent to the core LXXLL motif and disrupts the association of HAT coactivator complexes with promoter-bound estrogen receptors. These results provide strong in vivo evidence that histone acetylation plays a key role in hormone-induced gene activation and define cofactor acetylation as a novel regulatory mechanism in hormonal signaling.