Histone modifications regulate transcription by RNA polymerase II and maintain a balance between active and repressed chromatin states. The conserved Paf1 complex (Paf1C) promotes specific histone modifications during transcription elongation, but the mechanisms by which it facilitates these marks are undefined. We previously identified a 90-amino acid region within the Rtf1 subunit of Paf1C that is necessary for Paf1C-dependent histone modifications in Saccharomyces cerevisiae. Here we show that this histone modification domain (HMD), when expressed as the only source of Rtf1, can promote H3 K4 and K79 methylation and H2B K123 ubiquitylation in yeast. The HMD can restore histone modifications in rtf1Î cells whether or not it is directed to DNA by a fusion to a DNA binding domain. The HMD can facilitate histone modifications independently of other Paf1C subunits and does not bypass the requirement for Rad6-Bre1. The isolated HMD localizes to chromatin, and this interaction requires residues important for histone modification. When expressed outside the context of fulllength Rtf1, the HMD associates with and causes Paf1C-dependent histone modifications to appear at transcriptionally inactive loci, suggesting that its function has become deregulated. Finally, the Rtf1 HMDs from other species can function in yeast. Our findings suggest a direct and conserved role for Paf1C in coupling histone modifications to transcription elongation.transcription-coupled histone modifications | nucleosome I n eukaryotes, transcription occurs within the context of a restrictive, yet dynamic, chromatin environment. The posttranslational modification of histones represents a major mechanism by which cells control the structure of chromatin. Some modifications of histones include acetylation, methylation, and ubiquitylation. These modifications can alter the structural properties of nucleosomes and serve as specific effectors for the recruitment of proteins that further modify the chromatin template and regulate transcription (1).Monoubiquitylation of histone H2B on lysine (K) 123 in Saccharomyces cerevisiae is a conserved modification that is enriched on active genes but plays roles in both transcriptional repression and activation (2-4). Consistent with a repressive role, H2B monoubiquitylation stabilizes nucleosomes at yeast promoters (5), inhibits the association of the RNA polymerase (pol) II kinase Ctk1 with genes in yeast (6), and interferes with the recruitment of the elongation factor TFIIS to genes in human cells (7). In other studies, H2B monoubiquitylation has been shown to stimulate transcription of chromatin templates (8), promote nucleosome reassembly during transcription elongation (9), and inhibit chromatin compaction (10). H2B monoubiquitylation is also a prerequisite for other histone modifications that mark active genes. Ubiquitylation of H2B K123 by the Rad6-Bre1 ubiquitin conjugase-ligase proteins in yeast (11-13) is required for dimethylation and trimethylation of H3 K4 and K79 by the Set1/COMPASS and Dot1 methy...