Covalent modification by small ubiquitin‐related modifiers (SUMO) regulates p53 transcription activity through an undefined mechanism. Using reconstituted sumoylation components, we purified SUMO‐1‐conjugated p53 (Su‐p53) to near homogeneity. Su‐p53 exists in solution as a tetramer and interacts with p300 histone acetyltransferase as efficiently as the unmodified protein. Nevertheless, it fails to activate p53‐dependent chromatin transcription because of its inability to bind DNA. With sequential modification assays, we found that sumoylation of p53 at K386 blocks subsequent acetylation by p300, whereas p300‐acetylated p53 remains permissive for ensuing sumoylation at K386 and alleviates sumoylation‐inhibited DNA binding. While preventing the free form of p53 from accessing its cognate sites, sumoylation fails to disengage prebound p53 from DNA. The sumoylation‐deficient K386R protein, when expressed in p53‐null cells, exhibits higher transcription activity and binds better to the endogenous p21 gene compared with the wild‐type protein. These studies unravel a molecular mechanism underlying sumoylation‐regulated p53 function and further uncover a new role of acetylation in antagonizing the inhibitory effect of sumoylation on p53 binding to DNA.