The transcription factor Jun dimerization protein 2 (JDP2) binds directly to histones and inhibits the p300-mediated acetylation in vitro both of core histones and of reconstituted nucleosomes that contain JDP2-recognition sequences. The region of JDP2 that encompasses both its histone-binding domain and its DNA-binding region is essential for the inhibition of histone acetylation by histone acetyltransferases (HATs). Moreover, assays of nucleosome assembly in vitro demonstrate that JDP2 also has histone-chaperone activity.  Mutation of the region responsible for the inhibition of HAT activity within JDP2 eliminates repression of transcription from the c-jun promoter by JDP2, as well as the JDP2-mediated inhibition of retinoic acid-induced differentiation of F9 cells. Thus, JDP2 plays a key role as a repressor of cell differentiation by regulating the expression of genes with an AP-1 site via inhibition of histone acetylation and/or the assembly and disassembly of nucleosomes.