Drosophila nucleosome remodeling factor (NURF) is an ISWI-containing protein complex that facilitates nucleosome mobility and transcriptional activation in an ATP-dependent manner. Numerous studies have implicated histone acetylation in transcriptional activation. We investigated the relative contributions of these two chromatin modifications to transcription in vitro of a chromatinized adenovirus E4 minimal promoter that contains binding sites for the GAL4-VP16 activator. We found that NURF could remodel chromatin and stimulate transcription irrespective of the acetylation status of histones. In contrast, hyperacetylation of histones in the absence of NURF was unable to stimulate transcription, suggesting that NURF-dependent chromatin remodeling is an obligatory step in E4 promoter activation. When chromatin templates were first hyperacetylated and then incubated with NURF, significantly greater transcription stimulation was observed. The results suggest that changes in chromatin induced by acetylation of histones and the mobilization of nucleosomes by NURF combine synergistically to facilitate transcription. Experiments using single and multiple rounds of transcription indicate that these chromatin modifications stimulate transcription preinitiation as well as reinitiation.