Negative cofactor 2 (NC2) is an evolutionarily conserved transcriptional regulator that was originally identified as an inhibitor of basal transcription. Its inhibitory mechanism has been extensively characterized; NC2 binds to the TATA-binding protein (TBP), blocking the recruitment of TFIIA and TFIIB, and thereby inhibiting preinitiation complex assembly. NC2 is also required for expression of many yeast genes in vivo and stimulates TATA-less transcription in a Drosophila in vitro transcription system, but the mechanism responsible for the NC2-mediated stimulation of transcription is not understood. Here we establish that yeast NC2 can directly stimulate activated transcription from TATA-driven promoters both in vivo and in vitro, and moreover that this positive role requires the same surface of TBP that mediates the NC2 repression activity. On the basis of these results, we propose a model to explain how NC2 can mediate both repression and activation through the same surface of TBP.