Cellulase production in filamentous fungus Trichoderma reesei is highly responsive to various environmental cues involving multiple positive and negative regulators. XYR1 (Xylanase regulator 1) has been identified as the key transcriptional activator of cellulase gene expression in T. reesei. However, the precise mechanism by which XYR1 achieves transcriptional activation of cellulase genes is still not fully understood. Here, we identified the TrCYC8/TUP1 complex as a novel coactivator for XYR1 in T. reesei. CYC8/TUP1 is the first identified transcriptional corepressor complex mediating repression of diverse genes in Saccharomyces cerevisiae. Knockdown of Trcyc8 or Trtup1 resulted in markedly impaired cellulase gene expression in T. reesei. We found that TrCYC8/TUP1 was recruited to cellulase gene promoters upon cellulose induction and this recruitment is dependent on XYR1. We further observed that repressed Trtup1 or Trcyc8 expression caused a strong defect in XYR1 occupancy and loss of histone H4 at cellulase gene promoters. The defects in XYR1 binding and transcriptional activation of target genes in Trtup1 or Trcyc8 repressed cells could not be overcome by XYR1 overexpression. Our results reveal a novel coactivator function for TrCYC8/TUP1 at the level of activator binding, and suggest a mechanism in which interdependent recruitment of XYR1 and TrCYC8/TUP1 to cellulase gene promoters represents an important regulatory circuit in ensuring the induced cellulase gene expression. These findings thus contribute to unveiling the intricate regulatory mechanism underlying XYR1-mediated cellulase gene activation and also provide an important clue that will help further improve cellulase production by T. reesei.