H/ACA ribonucleoprotein particles are essential for ribosomal RNA and telomerase RNA processing and metabolism. Shq1p has been identified as an essential eukaryotic H/ACA small nucleolar (sno) ribonucleoparticle (snoRNP) biogenesis and assembly factor. Shq1p is postulated to be involved in the early biogenesis steps of H/ACA snoRNP complexes, and Shq1p depletion leads to a specific decrease in H/ACA small nucleolar RNA levels and to defects in ribosomal RNA processing. Shq1p contains two predicted domains as follows: an N-terminal CS (named after CHORD-containing proteins and SGT1) or HSP20-like domain, and a C-terminal region of high sequence homology called the Shq1 domain. Here we report the crystal structure and functional studies of the Saccharomyces cerevisiae Shq1p CS domain. The structure consists of a compact antiparallel -sandwich fold that is composed of two -sheets containing four and three -strands, respectively, and a short ␣-helix. Deletion studies showed that the CS domain is required for the essential functions of Shq1p. Point mutations in residues Phe-6, Gln-10, and Lys-80 destabilize Shq1p in vivo and induce a temperature-sensitive phenotype with depletion of H/ACA small nucleolar RNAs and defects in rRNA processing. Although CS domains are frequently found in co-chaperones of the Hsp90 molecular chaperone, no interaction was detected between the Shq1p CS domain and yeast Hsp90 in vitro. These results show that the CS domain is essential for Shq1p function in H/ACA snoRNP biogenesis in vivo, possibly in an Hsp90-independent manner.Modification of uridine to pseudouridine in ribosomal RNA and some spliceosomal RNAs is catalyzed by highly specialized ribonucleoparticle (RNP) 3 complexes called box H/ACA RNPs (1-5). Depending on their site of maturation and action H/ACA RNPs are classified into two classes, small nucleolar RNPs (snoRNPs) and small Cajal body RNPs. In Saccharomyces cerevisiae, H/ACA snoRNPs contain four proteins: Nhp2p (L7ae in archaea (6) and Cbf5p, also called dyskerin, in humans (7)), Nop10p, Gar1p, and a single small nucleolar RNA (snoRNA), specific to each snoRNP (8 -11). Cbf5p provides the pseudouridylase activity to the complex, and the snoRNA component provides the "guide RNA" for positioning the substrate RNA for modification (8,10,(12)(13)(14)(15). The 3Ј end of human telomerase RNA (hTR) contains an H/ACA scaRNA domain that binds the H/ACA proteins and is required for 3Ј end processing, accumulation, and localization of hTR to Cajal bodies (16 -19). In archaea, the assembly of H/ACA snoRNP appears to proceed by assembly of the protein components, followed by the incorporation of the H/ACA RNA (8, 20 -23). In eukaryotes, the assembly and final maturation of the holoenzyme RNP are more complicated, possibly because of subcellular compartmentalization, and require accessory proteins (22, 24). Two proteins specifically found in eukaryotes, Naf1p and Shq1p, were initially identified in yeast as factors involved in the assembly of H/ACA snoRNPs (23-25). Both Shq1p and Naf1...