Cartilage-derived retinoic acid-sensitive protein (CDRAP) is a small secreted matrix protein expressed in developing and adult cartilage and by chondrocytes in culture. We have previously shown that the expression of Cd-rap, like many other cartilage matrix proteins, is repressed by interleuldn 1β and that the transcription factor CCAAT/enhancer-binding protein (C/EBP) β plays an important role in the interleukin 1β-induced repression (Okazald, K., Li, J., Yu, H., Fukui, N., and Sandell, L. J. (2002) J. Biol. Chem. 277, 31526-31533). The coactivators CREB-binding protein (CBP) and p300 are transcriptional co-regulators that participate in the activities of many different transcription factors including C/EBP. Here we show that CBP/p300 can reverse the inhibitory effect of C/EBP and moreover can stimulate expression of Cd-rap. The mechanism of this effect is shown to involve a unique synergy whereby CBP/p300 stimulate Cd-rap gene expression by at least two mechanisms. First, binding of CBP/p300 to C/EBPβ leads to sequestration of C/EBP eliminating DNA binding and subsequent repression; second, binding of CBP/p300 to the transcriptional activator Sox9 increases Sox9 DNA binding to the Cd-rap promoter leading to further stimulation of gene transcription. This is an example of a complementary transcriptional network whereby two very different mechanisms act together to confer a functional increase in transcription. This new paradigm is likely generally applicable to cartilage genes as Col2a1 cartilage collagen gene responds similarly.