The Sir2 protein mediates gene silencing and repression of recombination at
the rDNA repeats in budding yeast. Here we show that Sir2 executes these f
unctions as a component of a nucleolar complex designated RENT (regulator o
f nucleolar silencing and telophase exit). Net1, a core subunit of this com
plex, preferentially cross-links to the rDNA repeats, but not to silent DNA
regions near telomeres or to active genes, and tethers the RENT complex to
rDNA. Net1 is furthermore required for rDNA silencing and nucleolar integr
ity. During interphase, Net1 and Sir2 colocalize to a subdomain within the
nucleolus, but at the end of mitosis a fraction of Sir2 leaves the nucleolu
s and disperses as fool throughout the nucleus, suggesting that the structu
re of rDNA silent chromatin changes during the cell cycle. Our findings sug
gest that a protein complex shown to regulate exit from mitosis is also inv
olved in gene silencing.