Condensation of chromatin into higher order structures is mediated by intra- and interfiber nucleosome-nucleosome interactions. Our goals in this study were to determine the impact specific activator-dependent histone acetylation had on chromatin condensation and to ascertain whether acetylation-induced changes in chromatin condensation were related to changes in RNA polymerase II (RNAPII) activity. To accomplish this, an in vitro model system was constructed in which the purified transcriptional activators, Tax and phosphorylated CREB (cAMP-response element-binding protein), recruited the p300 histone acetyltransferase to nucleosomal templates containing the human T-cell leukemia virus type-1 promoter sequences. We find that activator-dependent p300 histone acetylation disrupted both inter- and intrafiber nucleosome-nucleosome interactions and simultaneously led to enhanced RNAPII transcription from the decondensed model chromatin. p300 histone acetyltransferase activity had two distinct components: non-targeted, ubiquitous activity in the absence of activators and activator-dependent activity targeted primarily to promoter-proximal nucleosomes. Mass spectrometry identified several unique p300 acetylation sites on nucleosomal histone H3 (H3K9, H3K27, H3K36, and H3K37). Collectively, our data have important implications for understanding both the mechanism of RNAPII transcriptional regulation by chromatin and the molecular determinants of higher order chromatin structure.