The balance between acetylation and deacetylation of histone and nonhistone proteins controls gene expression in a variety of cellular processes, with transcription being activated by acetyltransferases and silenced by deacetylases. We report here the formation and enzymatic characterization of a complex between the acetyltransferase p300 and histone deacetylases. The C/H3 region of p300 was found to co-purify deacetylase activity from nuclear cell extracts. A prototype of class I histone deacetylases, HDAC1, interacts with p300 C/H3 domain in vitro and in vivo. The p300-binding protein E1A competes with HDAC1 for C/H3 binding; and, like E1A, HDAC1 overexpression interferes with either activation of Gal4p300 fusion protein or p300-dependent co-activation of two C/H3-binding proteins, MyoD and p53. The exposure to deacetylase inhibitors could reverse the dominant-negative effect of a C/H3 fragment insulated from the rest of the molecule, on MyoD- and p53-dependent transcription, whereas inhibition by E1A was resistant to trichostatin A. These data support the hypothesis that association between acetyltransferases and deacetylases can control the expression of genes implicated in cellular growth and differentiation, and suggest that the dominant-negative effect of the p300 C/H3 fragment relies on deacetylase recruitment.