We have previously shown that DNA polymerase ⑀ (Pol ⑀) of Saccharomyces cerevisiae binds stably to double-stranded DNA (dsDNA), a property not generally associated with DNA polymerases. Here, by reconstituting Pol ⑀ activity from Pol2p-Dpb2p and Dpb3p-Dpb4p, its two component subassemblies, we report that Dpb3p-Dpb4p, a heterodimer of histone-fold motif-containing subunits, is responsible for the dsDNA binding. Substitution of specific lysine residues in Dpb3p, highlighted by homology modeling of Dpb3p-Dpb4p based on the structure of the histone H2A-H2B dimer, indicated that they play roles in binding of dsDNA by Dpb3p-Dpb4p, in a manner similar to the histone-DNA interaction. The lysine-substituted dpb3 mutants also displayed reduced telomeric silencing, whose degree paralleled that of the dsDNA-binding activity of Pol ⑀ in the corresponding dpb3 mutants. Furthermore, additional amino acid substitutions to lysines in Dpb4p, to compensate for the loss of positive charges in the Dpb3p mutants, resulted in simultaneous restoration of dsDNA-binding activity by Pol ⑀ and telomeric silencing. We conclude that the dsDNA-binding property of Pol ⑀ is required for epigenetic silencing at telomeres.In eukaryotic cells, compaction of DNA into the higher order structure of chromatin involves many highly regulated steps and is required when cells go through S-phase in which the chromatin is temporarily unpacked for DNA replication (1). Epigenetic information on maintenance of both silenced and expressed states of chromatin must also be properly propagated during S-phase for these epigenetic states to be stably transmitted to subsequent generations (2). Thus, duplication of both chromosomal DNA and its chromatin states are tightly coupled processes. Proliferating cell nuclear antigen, one of the key components in the replication machinery serving as a platform for recruiting replication proteins (3), is considered to be a factor connecting DNA replication to chromatin assembly, most probably by directing chromatin assembly factor I to replicated DNA (4). As proliferating cell nuclear antigen mutants defective for chromatin assembly factor I interaction show reduced silencing (5), replication-coupled chromatin assembly mediated by these proteins is suggested to be a step required for proper inheritance of epigenetic chromatin structures.In Saccharomyces cerevisiae, DNA polymerase ⑀ (Pol ⑀), 4 another major component in DNA replication, has recently been shown to participate in the stable inheritance of the silenced state of chromatin (6). Pol ⑀ is a four-subunit complex comprising the catalytic subunit, Pol2p, and three auxiliary subunits, Dpb2p, Dpb3p, and Dpb4p (7-11); this subunit composition is conserved from yeast to humans (12-17). Among the auxiliary subunits, Dpb3p and Dpb4p contain a histone-fold motif (11, 16), a structural motif originally found in histones and involved in histone-histone, and histone-DNA interactions (18). The motifs in Dpb3p and Dpb4p are homologous in sequence to those in NF-YC and NF-YB (two sma...