Huntington's disease (HD) is an inherited neurodegenerative disease caused by expansion of a polyglutamine tract in the huntingtin protein. Transcriptional dysregulation has been implicated in HD pathogenesis. Here, we report that huntingtin interacts with the transcriptional activator Sp1 and coactivator TAFII130. Coexpression of Sp1 and TAFII130 in cultured striatal cells from wild-type and HD transgenic mice reverses the transcriptional inhibition of the dopamine D2 receptor gene caused by mutant huntingtin, as well as protects neurons from huntingtin-induced cellular toxicity. Furthermore, soluble mutant huntingtin inhibits Sp1 binding to DNA in postmortem brain tissues of both presymptomatic and affected HD patients. Understanding these early molecular events in HD may provide an opportunity to interfere with the effects of mutant huntingtin before the development of disease symptoms.