How post-translational histone modifications regulate DNA utilization constitutes one of the central questions of chromatin biology. In studying the mechanistic role of histone H4-K16 acetylation, a mark with a functional role in maintaining transcriptionally permissive DNA domains or directly promoting gene transcription, we found that this acetylation both disrupts higher-order chromatin structure and changes the functional interaction of chromatin-associated proteins. The potential significance of this finding for in vivo chromatin structure, establishment of euchromatic domains, and promotion of gene transcription is examined.