Gene silencing via heterochromatin formation plays a major role in cell differentiation and maintenance of homeostasis. Here we report the identification and characterization of a novel heterochromatinization factor in vertebrates, bromo adjacent homology domaincontaining protein 1 (BAHD1). This nuclear protein interacts with HP1, MBD1, HDAC5, and several transcription factors. Through electron and immunofluorescence microscopy studies, we show that BAHD1 overexpression directs HP1 to specific nuclear sites and promotes the formation of large heterochromatic domains, which lack acetyl histone H4 and are enriched in H3 trimethylated at lysine 27 (H3K27me3). Furthermore, ectopically expressed BAHD1 colocalizes with the heterochromatic inactive X chromosome (Xi). The BAH domain is required for BAHD1 colocalization with H3K27me3, but not with the Xi chromosome. As highlighted by whole genome microarray analysis of BAHD1 knockdown cells, BAHD1 represses several proliferation and survival genes, in particular the insulin-like growth factor II gene (IGF2). When overexpressed, BAHD1 specifically binds the CpG-rich P3 promoter of IGF2, which increases MBD1 and HDAC5 targeting at this locus. This region contains DNA-binding sequences for the transcription factor SP1, with which BAHD1 coimmunoprecipitates. Collectively, these findings provide evidence that BAHD1 acts as a silencer by recruiting at specific promoters a set of proteins that coordinate heterochromatin assembly.BAH domain ͉ epigenetics ͉ heterochromatin ͉ HP1 ͉ polycomb G ene repression in eukaryotes in response to developmental or environmental signals is a complex multistep process requiring the concerted action of many cellular factors, including DNA-binding transcription factors and cofactors. It also involves chromatin components and chromatin-binding/-modifying proteins, which are implicated in the establishment and maintenance of a condensed chromatin state, also referred to as facultative heterochromatin (1). Deregulation of these chromatin regulatory factors and aberrant chromatin modifications play important roles in various human diseases, including cancers, developmental abnormalities, and neurologic disorders (2-6). Moreover, several recent reports have linked histone modifications and infectious diseases (7). During a screen for human proteins that interact with microbial factors and that might play a role in bacterial pathogenicity, we identified a putative chromatin-associated protein, bromo adjacent homology domaincontaining protein 1 (BAHD1), which remains uncharacterized. One study correlated repression of the BAHD1 gene to poor prognosis in lung cancer (8), raising the possibility that BAHD1 might act as a tumor suppressor. This connection between BAHD1 and pathological processes prompted us to characterize the function of this protein.BAHD1 is so named because it contains a C-terminal BAH domain, which is found in several chromatin-binding proteins involved in transcriptional repression (9), including the yeast Sir3 protein (10). We invest...