EBV nuclear antigen 2 (EBNA2) and EBV nuclear antigen LP (EBNALP) are critical for B-lymphocyte transformation to lymphoblastoid cell lines (LCLs). EBNA2 activates transcription through recombination signal-binding immunoglobulin κJ region (RBPJ), a transcription factor associated with NCoR repressive complexes, and EBNALP is implicated in repressor relocalization. EBNALP coactivation with EBNA2 was found to dominate over NCoR repression. EBNALP associated with NCoR and dismissed NCoR, NCoR and RBPJ, or NCoR, RBPJ, and EBNA2 from matrix-associated deacetylase (MAD) bodies. In non-EBV-infected BJAB B lymphoma cells that stably express EBNA2, EBNALP, or EBNA2 and EBNALP, EBNALP was associated with hairy and enhancer of split 1 (hes1), cd21, cd23, and arginine and glutamate-rich 1 (arglu1) enhancer or promoter DNA and was associated minimally with coding DNA. With the exception of RBPJ at the arglu1 enhancer, NCoR and RBPJ were significantly decreased at enhancer and promoter sites in EBNALP or EBNA2 and EBNALP BJAB cells. EBNA2 DNA association was unaffected by EBNALP, and EBNALP was unaffected by EBNA2. EBNA2 markedly increased RBPJ at enhancer sites without increasing NCoR. EBNALP further increased hes1 and arglu1 RNA levels with EBNA2 but did not further increase cd21 or cd23 RNA levels. EBNALP in which the 45 C-terminal residues critical for transformation and transcriptional activation were deleted associated with NCoR but was deficient in dismissing NCoR from MAD bodies and from enhancer and promoter sites. These data strongly support a model in which EBNA2 association with NCoR-deficient RBPJ enhances transcription and EBNALP dismisses NCoR and RBPJ repressive complexes from enhancers to coactivate hes1 and arglu1 but not cd21 or cd23.