During melanocyte development, the cytokine Steel factor activates its receptor c-Kit, initiating a signal transduction cascade, which is vital for lineage determination via unknown downstream nuclear targets. c-Kit has recently been found to trigger mitogen-activated protein kinase-mediated phosphorylation of Microphthalmia (Mi), a lineage-restricted transcription factor, which, like Steel factor and c-Kit, is essential for melanocyte development. This cascade results in increased Mi-dependent transcriptional reporter activity. Here we examine the mechanism by which Mi is activated by this pathway. Phosphorylation does not significantly alter Mi's nuclear localization, DNA binding, or dimerization. However, the transcriptional coactivator p300/CBP selectively associates with mitogen-activated protein kinase-phosphorylated Mi, even under conditions in which non-MAPK phospho-Mi is more abundant. Moreover, p300/CBP coactivates Mi transcriptional activity in a manner dependent upon this phosphorylation. Mi thus joins CREB as a transcription factor whose signal-responsive phosphorylation regulates coactivator recruitment, in this case modulating lineage development in melanocytes.