The yeast SPT10 gene encodes a putative histone acetyltransferase (HAT) implicated as a global transcription regulator acting through basal promoters. Here we address the mechanism of this global regulation. Although microarray analysis confirmed that Spt10p is a global regulator, Spt10p was not detected at any of the most strongly affected genes in vivo. In contrast, the presence of Spt10p at the core histone gene promoters in vivo was confirmed. Since Spt10p activates the core histone genes, a shortage of histones could occur in spt10Delta cells, resulting in defective chromatin structure and a consequent activation of basal promoters. Consistent with this hypothesis, the spt10Delta phenotype can be rescued by extra copies of the histone genes and chromatin is poorly assembled in spt10Delta cells, as shown by irregular nucleosome spacing and reduced negative supercoiling of the endogenous 2mum plasmid. Furthermore, Spt10p binds specifically and highly cooperatively to pairs of upstream activating sequence elements in the core histone promoters [consensus sequence, (G/A)TTCCN(6)TTCNC], consistent with a direct role in histone gene regulation. No other high-affinity sites are predicted in the yeast genome. Thus, Spt10p is a sequence-specific activator of the histone genes, possessing a DNA-binding domain fused to a likely HAT domain.