The hallmark of mammalian spermiogenesis is the dramatic chromatin remodeling process wherein the nucleosomal histones are replaced by the transition proteins TP1, TP2, and TP4. Subsequently these transition proteins are replaced by the protamines P1 and P2. Hyperacetylation of histone H4 is linked to their replacement by transition proteins. Here we report that TP2 is acetylated in vivo as detected by anti-acetylated lysine antibody and mass spectrometric analysis. Further, recombinant TP2 is acetylated in vitro by acetyltransferase KAT3B (p300) more efficiently than by KAT2B (PCAF). In vivo p300 was demonstrated to acetylate TP2. p300 acetylates TP2 in its C-terminal domain, which is highly basic in nature and possesses chromatin-condensing properties. Mass spectrometric analysis showed that p300 acetylates four lysine residues in the C-terminal domain of TP2. Acetylation of TP2 by p300 leads to significant reduction in its DNA condensation property as studied by circular dichroism and atomic force microscopy analysis. TP2 also interacts with a putative histone chaperone, NPM3, wherein expression is elevated in haploid spermatids. Interestingly, acetylation of TP2 impedes its interaction with NPM3. Thus, acetylation of TP2 adds a new dimension to its role in the dynamic reorganization of chromatin during mammalian spermiogenesis.