BAG-1M, one of the isoforms of BAG-1, was reported to bind to DNA and stimulate general transcription when cells were stressed by heat shock (Zeiner, M., et al., Proc. Natl. Acad. Sci. USA 96, 10194-10199, 1999). Here we show that BAG-IM binds and enhances transcriptional activity of Cytomegalovirus (CMV) early gene promoter under unstressed conditions. This activity is unique to BAG-1M in that other isoforms, BAG-1S and BAG-1L, are much weaker in this activity, although all of the isoforms share common ubiquitin-like domain and BAG domain interacting with Hsp70/Hsc70. Deletion analysis of BAG-1M showed that C-terminal BAG domain is necessary to enhance the CMV promoter activity, suggesting that interaction with Hsp70/Hsc70 proteins may mediate this function. Another mutation in N-terminus, BAG-1M K(2-4)A, lost DNA binding capacity and majority of the promoter-enhancing activity. Our study demonstrates that both N-terminal DNA binding site and C-terminal Hsp70/Hsc70 binding site of BAG-1M play an important role in enhancing the CMV promoter activity.