Photoactivated phytochrome B (PHYB) binds to antagonistically acting PHYTOCHROME-INTERACTING transcription FACTORs (PIFs) to regulate hundreds of light responsive genes in Arabidopsis by promoting PIF degradation. However, whether PHYB directly controls the transactivation activity of PIFs remains ambiguous. Here we show that the prototypic PIF, PIF3, possesses a p53-like transcription activation domain (AD) consisting of a hydrophobic activator motif flanked by acidic residues. A PIF3mAD mutant, in which the activator motif is replaced with alanines, fails to activate PIF3 target genes in Arabidopsis, validating the functions of the PIF3 AD in vivo. Intriguingly, the N-terminal photosensory module of PHYB binds immediately adjacent to the PIF3 AD to repress PIF3's transactivation activity, demonstrating a novel PHYB signaling mechanism through direct interference of the transactivation activity of PIF3. Our findings indicate that PHYB, likely also PHYA, controls the stability and activity of PIFs via structurally separable dual signaling mechanisms.