The recurrent t(12;22) (q13;q12) chromosomal translocation associated with soft tissue clear cell sarcoma results in a chimeric protein EWS-ATF-1 that acts as a constitutive transcriptional activator. The CBP/p300 transcriptional coactivator, which links various transcriptional factors to basal transcription apparatus, participates in transcriptional activation, growth and cell cycle control and differentiation. In this study, we show that EWS-ATF-1 associates constitutively with CBP both in vitro and in vivo. Both EWS and ATF-1 fusion domains are needed for this interaction. Here, we demonstrate that EWS-ATF-1 represses p53/CBP-mediated trans-activation function. Overexpression of CBP can counteract this repressive effect of EWS-ATF-1. Taken together, these findings suggest that one of the mechanisms by which EWS-ATF-1 may cause tumors is through targeting CBP/p300 resulting in the loss of function of p53. This novel mechanism may be responsible for the development of these and other related solid tumors.