Differentiation of skeletal muscle cells and B lymphocytes is regulated by basic helix-loop-helix (bHLH) proteins. Both differentiation programs are inhibited by the adenovirus E1A oncoprotein. Analysis of E1A mutants has implicated two of its cellular-binding proteins, p300 and CBP, in controlling certain aspects of differentiation. We find that p300 can cooperate with tissue-specific bHLH proteins in activating target genes and requires only the bHLH domain of such proteins to stimulate E box-directed transcription. Importantly, the ability of bHLH proteins to activate transcription correlates with the presence of p300/CBP in E box-dependent DNA-binding complexes, because both phenomena require at least two adjacent E-box motifs. Microinjection of p300/CBP antibodies into myoblasts blocks terminal differentiation, cell fusion, and transcriptional activity of myogenic bHLH proteins. These results suggest that the function of p300/CBP is essential for the execution of key aspects of cellular differentiation.