The nuclear protein p68 (also known as Ddx5) is a prototypic member of the 'DEAD box' family of RNA helicases, which has been shown to be abnormally expressed and modified in colorectal tumors and to function as an important transcriptional regulator. Here, we show that p68 is modified in vivo on a single site (K53) by the small ubiquitin-like modifier-2 (SUMO-2). We demonstrate that the SUMO E3 ligase PIAS1 interacts with p68 and enhances its SUMO modification in vivo. To determine the functional consequences of SUMO modification, we compared the transcriptional activity of p68 and a K53R mutant that could not be SUMO-modified. Our data show that SUMO modification enhances p68 transcriptional repression activity and inhibits the ability of p68 to function as a coactivator of p53. These findings may be explained by the ability of wild type, but not K53R p68, to alter the modification state of chromatin by recruitment of histone deacetylase 1 (HDAC1).