N6-methyladenosine (m6A) modification plays important roles in bioprocesses and diseases. AlkB homolog 5 (ALKBH5) is one of two m6A demethylases. Here, we reveal that ALKBH5 is acetylated at lysine 235 (K235) by lysine acetyltransferase 8 and deacetylated by histone deacetylase 7. K235 acetylation strengthens the m6A demethylation activity of ALKBH5 by increasing its recognition of m6A on mRNA. RNA-binding protein paraspeckle component 1 (PSCP1) is a regulatory subunit of ALKBH5 and preferentially interacts with K235-acetylated ALKBH5 to recruit and facilitate the recognition of m6A mRNA by ALKBH5, thereby promoting m6A erasure. Mitogenic signals promote ALKBH5 K235 acetylation. K235 acetylation of ALKBH5 is upregulated in cancers and promotes tumorigenesis. Thus, our findings reveal that the m6A demethylation activity of ALKBH5 is orchestrated by its K235 acetylation and regulatory subunit PSPC1 and that K235 acetylation is necessary for the m6A demethylase activity and oncogenic roles of ALKBH5.