The O-linked N-acetylglucosamine (O-GlcNAc) modification of proteins is dynamic and abundant in the nucleus and cytosol. Several transcription factors, including Sp1, have been shown to contain this modification; however, the functional role of O-GlcNAc in these proteins has not been determined. In this paper we describe the use of the previously characterized glutamine-rich transactivation domain of Sp1 (B-c) as a model to investigate the role of O-GlcNAc in Sp1's transcriptionally relevant protein-to-protein interactions with the TATA-binding-protein-associated factor (TAF110) and holo-Sp1. When the model Sp1 peptide was overexpressed in primate cells, this 97-amino-acid domain of Sp1 was found to contain a dominant O-GlcNAc residue at high stoichiometry, which allowed the mapping and mutagenesis of this glycosylation site. In vitro interaction studies between this segment of Sp1 and Drosophila TAF110 or holo-Sp1 indicate that the O-GlcNAc modification functions to inhibit the largely hydrophobic interactions between these proteins. In HeLa cells, the mutation at the mapped glycosylation site was permissive for transcriptional activation. We propose the hypothesis that the removal of O-GlcNAc from an interaction domain can be a signal for protein association. O-GlcNAc may thereby prevent untimely and ectopic interactions.