Poly(ADP-ribose) polymerase 1 (PARP1) is a chromatin-associated nuclear protein and functions as a molecular stress sensor. At the cellular level, PARP1 has been implicated in a wide range of processes, such as maintenance of genome stability, cell death, and transcription. PARP1 functions as a transcriptional coactivator of nuclear factor kappaB (NF-kappaB) and hypoxia inducible factor 1 (HIF1). In proteomic studies, PARP1 was found to be modified by small ubiquitin-like modifiers (SUMOs). Here, we characterize PARP1 as a substrate for modification by SUMO1 and SUMO3, both in vitro and in vivo. PARP1 is sumoylated at the single lysine residue K486 within its automodification domain. Interestingly, modification of PARP1 with SUMO does not affect its ADP-ribosylation activity but completely abrogates p300-mediated acetylation of PARP1, revealing an intriguing crosstalk of sumoylation and acetylation on PARP1. Genetic complementation of PARP1-depleted cells with wild-type and sumoylation-deficient PARP1 revealed that SUMO modification of PARP1 restrains its transcriptional coactivator function and subsequently reduces gene expression of distinct PARP1-regulated target genes.