Cohesins hold sister chromatids together from DNA replication until they are segregated. Although cohesins Smc1, Smc3, and Scc1/Rad21 are involved in chromatid cohesion and other cellular processes, little is known about the other mitotic cohesin subunit, Scc3/STAG. Here we describe STAG/Scc3, which may act as a transcriptional co-activator. STAG2 is able to enhance the activity of the tumor necrosis factor alpha, the CD69, and the human immunodeficiency virus long terminal repeat promoters in a NF-kappaB-dependent manner. In addition, STAG2 interacts with the viral transactivator Tat and enhances the Tat-mediated activation of the human immunodeficiency virus long terminal repeat promoter. Moreover, STAG2 co-activates a multimeric NF-kappaB reporter construct and enhances the activity of the transactivation domain of p65/RelA in a Gal4 system. This function is dependent on one of the LXXLL co-activation motives present in this cohesin and is substantiated by the interaction of STAG2 with the p65 subunit of NF-kappaB. These results describe a novel activity for cohesins, suggesting a role for STAG/Scc3 in transcriptional regulation.