Bipartite geminiviruses encode a small protein, AC2, that functions as a transactivator of viral transcription and a suppressor of RNA silencing. A relationship between these two functions had not been investigated before. We characterized both of these functions for AC2 from Mungbean yellow mosaic virus-Vigna (MYMV). When transiently expressed in plant protoplasts, MYMV AC2 strongly transactivated the viral promoter; AC2 was detected in the nucleus, and a split nuclear localization signal (NLS) was mapped. In a model Nicotiana benthamiana plant, in which silencing can be triggered biolistically, AC2 reduced local silencing and prevented its systemic spread. Mutations in the AC2 NLS or Zn finger or deletion of its activator domain abolished both these effects, suggesting that suppression of silencing by AC2 requires transactivation of host suppressor(s). In line with this, in Arabidopsis protoplasts, MYMV AC2 or its homologue from African cassava mosaic geminivirus coactivated >30 components of the plant transcriptome, as detected with Affymetrix ATH1 GeneChips. Several corresponding promoters cloned from Arabidopsis were strongly induced by both AC2 proteins. These results suggest that silencing suppression and transcription activation by AC2 are functionally connected and that some of the AC2-inducible host genes discovered here may code for components of an endogenous network that controls silencing.RNA silencing, also referred to as RNA interference and posttranscriptional gene silencing, is an evolutionarily conserved mechanism that protects cells against invasive nucleic acids, such as viruses, transposons, and transgenes (19). RNA silencing is triggered by double-stranded RNA (dsRNA), effects sequence-specific degradation of cognate viral or endogenous RNA, and, at least in plants, causes de novo methylation of homologous DNA (33). In plants, silencing is increasingly viewed as an adaptive immune system targeting pathogenic RNA and DNA (28, 52). To counteract this defense system, viruses have evolved suppressor proteins (4, 6, 37) that interfere with different steps of the RNA silencing pathway (11), thus allowing efficient viral replication in a single cell and systemic spread of the infection. For example, the coat protein of Turnip crinkle virus blocks generation of small interfering RNAs (siRNAs) (38), derived from dsRNA processing by the RNase III-like enzyme Dicer at an early initiation step of silencing. p19 of tombusviruses binds siRNAs (27, 51), thereby inhibiting a downstream step involving cleavage of cognate RNA by an siRNA-guided, RNA-induced silencing complex. Movement protein P25 of Potato virus X prevents systemic spread of silencing through the vascular system (54). Potyvirus protein HC-Pro might interfere with both the initiation and spread of silencing, although the mechanism of HC-Pro action is still a matter of debate (reference 32 and references therein). Interestingly, HC-Pro and other viral suppressors not only are able to suppress RNA silencing but also can interfere with a relate...