When located next to chromosomal elements such as telomeres, genes can be subjected to epigenetic silencing. In yeast, this is mediated by the propagation of the SIR proteins from telomeres toward more centromeric regions. Particular transcription factors can protect downstream genes from silencing when tethered between the gene and the telomere, and they may thus act as chromatin domain boundaries. Here we have studied one such transcription factor, CTF-1, that binds directly histone H3. A deletion mutagenesis localized the barrier activity to the CTF-1 histone-binding domain. A saturating point mutagenesis of this domain identified several amino acid substitutions that similarly inhibited the boundary and histone binding activities. Chromatin immunoprecipitation experiments indicated that the barrier protein efficiently prevents the spreading of SIR proteins, and that it separates domains of hypoacetylated and hyperacetylated histones. Together, these results suggest a mechanism by which proteins such as CTF-1 may interact directly with histone H3 to prevent the propagation of a silent chromatin structure, thereby defining boundaries of permissive and silent chromatin domains.The expression state of a eukaryotic gene depends in part on its location in the chromosome. This position effect results from the organization of eukaryotic genomes into discrete functional domains, defined by local differences in chromatin structure. The expression of genes within each domain appears to be defined and maintained by the concerted action of regulatory elements such as promoters, enhancers, silencers, and locus control regions. Individual domains may be bordered by boundary elements that separate regions of permissive and silent chromatin. Experimentally, boundary elements have been defined functionally by their ability to protect against position effect when flanking the assayed gene. Examples of boundary elements in metazoans include the subtelomeric anti-silencing regions at yeast telomeres, the scs and scsЈ elements flanking the 87A1 hsp70 locus in Drosophila, and the chicken -globin boundary elements (1-4). Several proteins have been associated with barrier activities in yeast, Drosophila, and mammalian cells (5).Transcriptional repression of the yeast Saccharomyces cerevisiae subtelomeric regions is one of the best-studied examples of position-dependent gene expression. This phenomenon is referred to as telomere position effect and is similar to the position effect variegation (PEV) initially described in Drosophila (6). Transcriptional silencing at yeast telomeres is associated with a heterochromatin-like structure (7,8). DNA wrapped in transcriptionally silent chromatin replicates late in S phase and is refractory to some modifying agents. In addition, nucleosomes have reduced acetylation compared with nucleosomes from active region of the genome (9, 10).Transcriptional silencing at subtelomeric regions is mediated by a multiprotein nucleosome binding complex called the SIR complex, composed of the Sir2, Sir3, and...