Merkel cell polyomavirus (MCV) is a small DNA tumor virus that persists in human skin and causes Merkel cell carcinoma (MCC) in immunocompromised individuals. The multi-functional protein MCV small T (sT) activates viral DNA replication by stabilizing large T (LT) and promotes cell transformation through the LT stabilization domain (LTSD). Using MCVΔsT, a mutant MCV clone that ablates sT, we investigated the role of sT in MCV genome maintenance. sT was dispensable for initiation of viral DNA replication, but essential for maintenance of the MCV genome and activation of viral early and late gene expression for progression of the viral lifecycle. Furthermore, in phenotype rescue studies, exogenous sT activated viral DNA replication and mRNA expression in MCVΔsT through the LTSD. While exogenous LT expression, which mimics LT stabilization, increased viral DNA replication, it did not activate viral mRNA expression. After cataloging transcriptional regulator proteins by proximity-based MCV sT-host protein interaction analysis, we validated LTSD-dependent sT interaction with four transcriptional regulators: Cux1, c-Jun, BRD9, and CBP. Functional studies revealed Cux1 and c-Jun as negative regulators, and CBP and BRD9 as positive regulators of MCV transcription. CBP inhibitor A-485 suppressed sT-induced viral gene activation in replicating MCVΔsT and inhibited early gene expression in MCV-integrated MCC cells. These results suggest that sT promotes viral lifecycle progression by activating mRNA expression and capsid protein production through interaction with the transcriptional regulators. This activity is essential for MCV genome maintenance, suggesting a critical role of sT in MCV persistence and MCC carcinogenesis.