Proper transcription by RNA polymerase II is dependent on the modification state of the chromatin template. The Paf1 complex is associated with RNA polymerase II during transcription elongation and is required for several histone modifications that mark active genes. To uncover additional factors that regulate chromatin or transcription, we performed a genetic screen for mutations that cause lethality in the absence of the Paf1 complex component Rtf1. Our results have led to the discovery of a previously unstudied gene, RKR1. Strains lacking RKR1 exhibit phenotypes associated with defects in transcription and chromatin function. These phenotypes include inositol auxotrophy, impaired telomeric silencing, and synthetic lethality with mutations in SPT10, a gene that encodes a putative histone acetyltransferase. In addition, deletion of RKR1 causes severe genetic interactions with mutations that prevent histone H2B lysine 123 ubiquitylation or histone H3 lysine 4 methylation. RKR1 encodes a conserved nuclear protein with a functionally important RING domain at its carboxy terminus. In vitro experiments indicate that Rkr1 possesses ubiquitin-protein ligase activity. Taken together, our results identify a new participant in a protein ubiquitylation pathway within the nucleus that acts to modulate chromatin function and transcription.Progression of the RNA polymerase II (Pol II) transcription cycle involves the coordinated functions of a large number of regulatory proteins. During transcription elongation, proteins that associate with Pol II assist it in overcoming obstacles to transcription, including DNA damage and condensed chromatin structure. Transcription elongation factors use a variety of mechanisms to facilitate movement of Pol II through a nucleosomal template and coordinate transcription with RNA processing. The Paf1 complex is a Pol II-associated factor that alters the state of the chromatin template during transcription elongation. Biochemical purification of the Saccharomyces cerevisiae Paf1 complex showed that it minimally contains five proteins: Paf1, Ctr9, Rtf1, Cdc73, and Leo1 (37,44,76). Chromatin immunoprecipitation experiments demonstrated that this complex is associated with the open reading frames (ORFs) of actively transcribed genes (37,59,72). Strains lacking members of the Paf1 complex are sensitive to the base analogs 6-azauracil and mycophenolic acid and exhibit altered RNA levels for a large number of genes (10,44,57,76). These results, combined with genetic and physical interactions with the elongation factors Spt4-Spt5 and Spt16-Pob3 (yFACT complex) (76), suggest that the Paf1 complex is important for transcription elongation. Members of the Paf1 complex are also required for proper 3Ј end formation of both polyadenylated and nonpolyadenylated transcripts (57, 68).It is now well established that the arrangements of posttranslational modifications on nucleosomal histones, along with interactions between histones and nonhistone proteins, coordinately affect chromatin structure. Histones can...