Heterochromatin in fission yeast is targeted dynamically by opposing chromatin-modifying activities capable of alleviating or promoting transcriptional gene silencing. In this study, we report the biochemical and genetic characterization of a ubiquitin-conjugating enzyme Rhp6 (a homolog of budding yeast Rad6), which has been shown to negatively affect stability of heterochromatic structures. We show that Rhp6 is a component of the multisubunit protein complex (termed HULC) that also contains two RING finger proteins Rfp1 and Rfp2, sharing homology with budding yeast Bre1 protein and a unique serinerich protein Shf1. HULC is required for ubiquitination of histone H2B at lysine 119 (H2B-K119), and it localizes to heterochromatic sequences. Moreover, our analyses suggest that Rhp6-induced changes in heterochromatic silencing are mediated predominantly through H2B ubiquitination (ubH2B), and they correlate with increased RNA polymerase II levels at repeat elements embedded within heterochromatin domains. Interestingly, heterochromatic derepression caused by Rhp6 occurs independently of the involvement of HULC subunits and ubH2B in methylation of histone H3 at lysine 4 (H3K4me). These analyses implicate ubH2B in modulation of heterochromatin, which has important implications for dynamics and many functions associated with heterochromatic structures.Histone post-translational modifications play an important role in modulating chromatin structure that underlies various chromosomal processes in eukaryotic cells (1, 2). These modifications, including acetylation, phosphorylation, methylation, and ubiquitination of histones, have been shown to regulate transcription, chromosome condensation, and DNA repair (1, 3-5). Specific histone modifications can modify chromatin structure either directly by influencing histone-DNA and/or histone-histone interactions, as suggested in the case of histone acetylation (6), or mediate recruitment of other factors capable of modifying chromatin (7,8). Factors containing interaction motifs for binding to histones methylated at specific lysine residues have been identified and shown to mediate targeting of chromatin-modifying activities implicated in either activating or repressing transcription (9 -12). For example, histone H3 methylated at lysine 9 (H3K9me) recruits conserved heterochromatin protein HP1 via its chromodomain to mediate assembly of condensed heterochromatic structures (13-15). In contrast, methylation of H3 lysine 4 (H3K4me), found at transcriptionally poised euchromatic regions, provides binding sites for PHD, chromodomain, or tudor domain-containing proteins to recruit gene activation machinery (16 -20).In addition to well studied functions of histone acetylation and methylation in modulating chromatin, histone ubiquitination has emerged as an important modification for gene regulation. In particular, mono-ubiquitination of H2B (ubH2B) 2 has been shown to play a crucial role in the maintenance of transcriptionally poised chromatin environment (3, 21, 22). Ubiquitin is tran...