Pax5/B cell lineage specific activator protein (BSAP) is a B lineage-specific regulator that controls the B lineage-specific gene expression program and immunoglobulin gene V(H) to DJ(H) recombination. Despite extensive studies on its multiple functions, little is known about how the activity of Pax5 is regulated. Here, we show that co-expression of histone acetyltransferase E1A binding protein p300 dramatically enhances Pax5-mediated transcriptional activation. The p300-mediated enhancement is dependent on its intrinsic histone acetyltransferase activity. Moreover, p300 interacts with the C terminus of Pax5 and acetylates multiple lysine residues within the paired box DNA binding domain of Pax5. Mutations of lysine residues 67 and 87/89 to alanine within Pax5 abolish p300-mediated enhancement of Pax5-induced Luc-CD19 reporter expression in HEK293 cells and prevent Pax5 to activate endogenous Cd19 and Blnk expression in Pax5(-/-) murine pro B cells. These results uncover a novel level of regulation of Pax5 function by p300-mediated acetylation.