EBNA2 is essential for Epstein-Barr virus (EBV) immortalization of B lymphocytes. EBNA2 functions as a transcriptional activator and targets responsive promoters through interaction with the cellular DNA binding protein CBF1. We have examined the mechanism whereby EBNA2 overcomes CBF1- mediated transcriptional repression. A yeast two-hybrid screen performed using CBF1 as the bait identified a protein, SKIP, which had not previously been recognized as a CBF1-associated protein. Protein-protein interaction assays demonstrated contacts between SKIP and the SMRT, CIR, Sin3A, and HDAC2 proteins of the CBF1 corepressor complex. Interestingly, EBNA2 also interacted with SKIP in glutathione S-transferase affinity and mammalian two- hybrid assays and colocalized with SKIP in immunofluorescence assays. Interaction with SKIP was not affected by mutation of EBNA2 conserved region 6, the CBF1 interaction region, but was abolished by mutation of conserved region 5. Mutation of conserved region 5 also severely impaired EBNA2 activation of a reporter containing CBF1 binding sites. Thus, interaction with both CBF1 and SKIP is necessary for efficient promoter activation by EBNA2. A model is presented in which EBNA2 competes with the SMRT-corepressor complex for contacts on SKIP and CBF1.