Differentiation of smooth muscle cells is accompanied by the transcriptional activation of an array of muscle-specific genes controlled by serum response factor (SRF). Myocardin is a cardiac and smooth muscle-specific expressed transcriptional coactivator of SRF and is sufficient and necessary for smooth muscle gene expression. Here, we show that myocardin induces the acetylation of nucleosomal histones surrounding SRF-binding sites in the control regions of smooth muscle genes. The promyogenic activity of myocardin is enhanced by p300, a histone acetyltransferase that associates with the transcription activation domain of myocardin. Conversely, class II histone deacetylases interact with a domain of myocardin distinct from the p300-binding domain and suppress smooth muscle gene activation by myocardin. These findings point to myocardin as a nexus for positive and negative regulation of smooth muscle gene expression by changes in chromatin acetylation.