Mammalian rRNA genes are preceded by a terminator element that is recognized by the transcription termination factor TTF‐I. In exploring the functional significance of the promoter‐proximal terminator, we found that TTF‐I associates with the p300/CBP‐associated factor PCAF, suggesting that TTF‐I may target histone acetyltransferase to the rDNA promoter. We demonstrate that PCAF acetylates TAFI68, the second largest subunit of the TATA box‐binding protein (TBP)‐containing factor TIF‐IB/SL1, and acetylation enhances binding of TAFI68 to the rDNA promoter. Moreover, PCAF stimulates RNA polymerase I (Pol I) transcription in a reconstituted in vitro system. Consistent with acetylation of TIF‐IB/SL1 being required for rDNA transcription, the NAD+‐dependent histone deacetylase mSir2a deacetyl ates TAFI68 and represses Pol I transcription. The results demonstrate that acetylation of the basal Pol I transcription machinery has functional consequences and suggest that reversible acetylation of TIF‐IB/SL1 may be an effective means to regulate rDNA transcription in response to external signals.