The interaction between the chimeric activator GAL4-VP16, consisting of the DNA binding domain of GAL4 and the acidic activation domain of VP16, and its target in the transcriptional machinery was studied in vitro. GAL4-VP16 stimulated transcription from a promoter bearing GAL4 sites, and greatly inhibited transcription from a promoter bearing binding sites for the dA:dT activator and from a basal promoter bearing only a TATA box. Mutations in the acidic domain that reduced activation from the GAL4 site promoter also reduced inhibition from the dA:dT promoter, indicating a similar interaction between VP16 and its target in both processes. Strikingly, if the DNA binding domain of GAL4-VP16 was occupied by a GAL4 site oligonucleotide, the protein inhibited activation by the dA:dT activator but did not inhibit basal transcription. We propose that, under these conditions, GAL4-VP16 acted to titrate an "adaptor" that bridges an interaction between the upstream activator and the basic transcriptional machinery at the TATA box. © 1990.