Activation of transcription in eukaryotes depends upon the interplay between transcriptional activators and general transcription factors. While direct contacts between activators and general factors have been demonstrated in vitro, an additional class of proteins, termed co-activators, is also required of transcriptional activation. Here we describe a yeast protein, SUB1, that was isolated as a suppressor of the cold-sensitive TFIIB R78H mutant. The N-terminal third of SUB1 is highly similar to the mammalian co-activator PC4. We show that increased expression of SUB1 suppresses two alleles of TFIIB (E62G, R78H) specifically and that the deletion of SUB1 is lethal in combination with these same two alleles. We show that SUB1 binds to TFIIB in vitro and that it specifically inhibits the formation of TBP-TFIIB-promoter complexes. Furthermore we show that increasing the copy number of SUB1 stimulates transcriptional activation in vivo. Based on our results and recent observations of others, we propose that SUB1 plays a role in the release of TFIIB from the transcription complex during transcription initiation.