Spt-Ada-Gcn5 acetyltransferase (SAGA) is a previously described histone acetyltransferase/transcriptional coactivator complex in yeast. At promoters of certain genes (HIS3 and TRP3), SAGA has an inhibitory function involving a nonproductive TATA-binding protein interaction mediated by the Spt3 and Spt8 subunits. Related to this, Spt8-less SAGA is a major form of the complex under activating conditions for these genes. In the present study, we purify this activation-specific complex, called SALSA (SAGA altered, Spt8 absent). Besides lacking Spt8, SALSA contains Spt7 subunit that is truncated. Examining the role of this subunit, we find that C-terminally truncated SPT7 resulted in derepressed HIS3 transcription. Furthermore, when grown in rich media (repressing conditions), wild-type cells yielded predominantly SAGA, but Spt7 C-terminal truncations resulted primarily in a form of complex similar to SALSA. Thus, SALSA-like structure and activating function can be partially recapitulated in yeast by truncating the C terminus of Spt7. Overall, these results lead to a model that for a subset of promoters SAGA is inhibitory through Spt3, Spt8, and an Spt8-interacting subdomain of Spt7, whereas SALSA is a form of complex for positive transcriptional regulation. These data clarify a mechanism by which a transcriptional regulatory complex can switch between positive and negative modulation.