Covalent modification by small ubiquitin-related modifiers (SUMO) regulates p53 transcription activity through an undefined mechanism. Using reconstituted sumoylation components, we purified SUMO-1-conjugated p53 (Su-p53) to near homogeneity. Su-p53 exists in solution as a tetramer and interacts with p300 histone acetyltransferase as efficiently as the unmodified protein. Nevertheless, it fails to activate p53-dependent chromatin transcription because of its inability to bind DNA. With sequential modification assays, we found that sumoylation of p53 at K386 blocks subsequent acetylation by p300, whereas p300-acetylated p53 remains permissive for ensuing sumoylation at K386 and alleviates sumoylation-inhibited DNA binding. While preventing the free form of p53 from accessing its cognate sites, sumoylation fails to disengage prebound p53 from DNA. The sumoylation-deficient K386R protein, when expressed in p53-null cells, exhibits higher transcription activity and binds better to the endogenous p21 gene compared with the wild-type protein. These studies unravel a molecular mechanism underlying sumoylation-regulated p53 function and further uncover a new role of acetylation in antagonizing the inhibitory effect of sumoylation on p53 binding to DNA.