Human cystic fibrosis transmembrane conductance regulator gene (CFTR) transcription is tightly regulated by nucleotide sequences upstream of the initiator sequences. Our studies of human CFTR transcription focus on identifying transcription factors bound to an inverted CCAAT consensus or "Y-box element." The human homeodomain CCAAT displacement protein/cut homolog (CDP/cut) can bind to the Y-box element through a cut repeat and homeobox. Analysis of stably transfected cell lines with wild-type and mutant human CFTR-directed reporter genes demonstrates that human histone acetyltransferase GCN5 and transcription factor ATF-1 can potentiate CFTR transcription through the Y-box element. We have found 1) that human CDP/cut acts as a repressor of CFTR transcription through the Y-box element by competing for the sites of transactivators hGCN5 and ATF-1; 2) that the ability of CDP/cut to repress activities of hGCN5 and ATF-1 activity is contingent on the amount of CDP/cut expression; 3) that histone acetylation may have a role in the regulation of gene transcription by altering the accessibility of the CFTR Y-box for sequence-specific transcription factors; 4) that trichostatin A, an inhibitor of histone deacetylase activity, activates transcription of CFTR through the Y-box element; 5) that the inhibition of histone deacetylase activity leads to an alteration of local chromatin structure requiring an intact Y-box sequence in CFTR; 6) that immunocomplexes of CDP/cut possess an associated histone deacetylase activity; 7) that the carboxyl region of CDP/cut, responsible for the transcriptional repressor function, interacts with the histone deacetylase, HDAC1. We propose that CFTR transcription may be regulated through interactions with factors directing the modification of chromatin and requires the conservation of the inverted CCAAT (Y-box) element of the CFTR promoter.