Histone H3 methylated at lysine 4 (H3-meK4) co-localizes with hyperacetylated histones H3 and H4 in transcriptionally active chromatin, but mechanisms that establish H3-meK4 are poorly understood. Previously, we showed that the hematopoietic-specific activator NF-E2, which is required for beta-globin transcription in erythroleukemia cells, induces histone H3 hyperacetylation and H3-meK4 at the adult beta-globin genes (betamajor and betaminor). Chromatin immunoprecipitation analysis indicated that NF-E2 occupies hypersensitive site two (HS2) of the beta-globin locus control region. The mechanism of NF-E2-mediated chromatin modification was investigated by complementation analysis in NF-E2-null CB3 erythroleukemia cells. The activation domain of the hematopoietic-specific subunit of NF-E2 (p45/NF-E2) contains two WW domain-binding motifs (PXY-1 and PXY-2). PXY-1 is required for activation of beta-globin transcription. Here, we determined which step in NF-E2-dependent transactivation is PXY-1-dependent. A p45/NF-E2 mutant lacking 42 amino acids of the activation domain, including both PXY motifs, and a mutant lacking only PXY-1 were impaired in inducing histone H3 hyperacetylation, H3-meK4, and RNA polymerase II recruitment. The PXY motifs were not required for transactivation in the context of a GAL4 DNA-binding domain fusion to p45/NF-E2 in transient transfection assays. As the PXY-1 mutant occupied HS2 normally, the chromatin modification defect occurred post-DNA binding. PXY-1 was not required for recruitment of the histone acetyltransferases cAMP-responsive element-binding protein-binding protein (CBP) and p300 to HS2. These results indicate that PXY-1 confers chromatin-specific transcriptional activation via interaction with a co-regulator distinct from CBP/p300 or by regulating CBP/p300 function.