Regulation of chromatin in eukaryotic transcription requires histone-modifying enzymes, nucleosome remodeling complexes, and histone chaperones. Specific regulation of histone incorporation/eviction by histone chaperones on the promoter (e.g., region specific) is still poorly understood. In the present study, we show that direct and functional interaction of histone chaperone and DNA-binding transcription factor leads to promoter region-specific histone incorporation and inhibition of histone acetylation. We report here that the DNA-binding transcription factor Krüppel-like factor 5 (KLF5) interacts with the novel histone chaperone acidic nuclear phosphoprotein 32B (ANP32B), leading to transcriptional repression of a KLF5-downstream gene. We further show that recruitment of ANP32B onto the promoter region requires KLF5 and results in promoter region-specific histone incorporation and inhibition of histone acetylation by ANP32B. Extracellular stimulus (e.g., phorbol ester) regulates this mechanism in the cell. Collectively, we have identified a novel histone chaperone, ANP32B, and through analysis of the actions of this factor show a new mechanism of promoter region-specific transcriptional regulation at the chromatin level as mediated by the functional interaction between histone chaperone and DNA-binding transcription factor.