The conserved Sir2 family of proteins has protein deacetylase activity that is dependent on NAD (the oxidized form of nicotinamide adenine dinucleotide). Although histones are one likely target for the enzymatic activity of eukaryotic Sir2 proteins, little is known about the substrates and roles of prokaryotic Sir2 homologs. We reveal that an archaeal Sir2 homolog interacts speciÞcally with the major archaeal chromatin protein, Alba, and that Alba exists in acetylated and nonacetylated forms. Furthermore, we show that Sir2 can deacetylate Alba and mediate transcriptional repression in a reconstituted in vitro transcription system. These data provide a paradigm for how Sir2 family proteins inßuence transcription and suggest that modulation of chromatin structure by acetylation arose before the divergence of the archaeal and eukaryotic lineages.