A novel multidomain transcription coactivator SAYP can also repress transcription in heterochromatin.

Enhancers of yellow (e(y)) is a group of genetically and functionally related genes for proteins involved in transcriptional regulation. The e(y)3 gene of Drosophila considered here encodes a ubiquitous nuclear protein that has homologues in other metazoan species. The protein encoded by e(y)3, named Supporter of Activation of Yellow Protein (SAYP), contains an AT-hook, two PHD fingers, and a novel evolutionarily conserved domain with a transcriptional coactivator function. Mutants expressing a truncated SAYP devoid of the conserved domain die at a midembryonic stage, which suggests a crucial part for SAYP during early development. SAYP binds to numerous sites of transcriptionally active euchromatin on polytene chromosomes and coactivates transcription of euchromatin genes. Unexpectedly, SAYP is also abundant in the heterochromatin regions of the fourth chromosome and in the chromocenter, and represses the transcription of euchromatin genes translocated to heterochromatin; its PHD fingers are essential to heterochromatic silencing. Thus, SAYP plays a dual role in transcription regulation in euchromatic and heterochromatic regions.