During development and differentiation, genes become competent to be expressed or are stably silenced in an epigenetically heritable manner. This selective activation/repression of genes leads to the differentiation of tissue types. Our group is interested in the molecular mechanisms that lead to the heritable transmission of the silenced state. To address this problem, we are studying the mechanism of gene silencing by the Polycomb group genes (PcG) in Drosophila. The PcG genes encode a diverse group of proteins known to be important for silencing of homeotic and segmentation genes during development. Some PcG genes encode histone-modifying proteins that silence transcription by transforming chromatin to an inactive state, but how do these non-DNA binding PcG proteins get to the DNA? PcG proteins act through poorly defined cis-acting DNA sequences called Polycomb group Response Elements (PREs). We have been studying two proteins that bind to PREs, Pho and Phol. Pho and Phol are zinc-finger proteins closely related to the mammalian transcription factor YY1. Pho and Phol are 80% identical in their zinc-finger regions and bind to the same DNA sequence in vitro. The phenotype of phol, pho double mutants is much more severe than the phenotype of either single mutant suggesting that phol and pho encode redundant activities. It has been proposed that Pho and Phol recruit and/or anchor non-DNA binding Polycomb proteins to the DNA. We have recently completed experiments to begin to address this hypothesis. Chromatin-immunoprecipitation experiments have shown that Pho and Phol are bound to a PRE in the Ubx gene in tissue culture cells and in wing disks from Drosophila larvae. The non-DNA binding Polycomb group proteins Pc and E(z) are also closely associated with this PRE. Treatment of tissue culture cells with Pho-RNAi to deplete Pho protein causes a loss of E(z) and Pc binding to the PRE, suggesting that Pho anchors E(z) and Pc to the DNA. In wing disks from pho mutants which lack Pho protein, E(z) and Pc are still bound to the DNA. However in pho, phol double mutant wing disks, E(z) and Pc are lost from the DNA, suggesting that Phol and Pho act redundantly to anchor these proteins to the DNA in wing disks. Surprisingly, although Phol and Pho are bound to many of the same DNA fragments in vivo, their distribution is not identical. Thus, although these two proteins have overlapping activities, they may interact with some DNA sequences and proteins differently. Regulatory sequences in eukaryotic genes can be located many tens of kilobases away from the promoter. How do these distant regulatory sequences activate or repress the promoter? One model is that proteins bound to a distant enhancer or silencer interact with proteins bound near the promoter causing a loop of the intervening DNA. One of the fragments of DNA from the Drosophila engrailed gene that has PRE activity can also mediate interactions between distant DNA fragments. We are currently trying to understand the function of this DNA in vivo by deleting it from the endogenous engrailed gene. Our results suggest that this fragment of DNA acts to facilitate interactions between a distant enhancer involved in positively regulating engrailed expression in the wing and the engrailed promoter. Thus, this fragment of DNA acts as a PRE (a negative regulatory element) in some transgenes, but as a positive regulatory element in its natural context. These results are consistent with the idea that the role of this element is to facilitate the interactions between enhancers or silencers with distant promoter elements.