FACT interacts with Set3 HDAC and fine-tunes GAL1 transcription in response to environmental stimulation.

The histone chaperone facilitates chromatin transactions (FACT) functions in various DNA transactions. How FACT performs these multiple functions remains largely unknown. Here, we found, for the first time, that the N-terminal domain of its Spt16 subunit interacts with the Set3 histone deacetylase complex (Set3C) and that FACT and Set3C function in the same pathway to regulate gene expression in some settings. We observed that Spt16-G132D mutant proteins show defects in binding to Set3C but not other reported FACT interactors. At the permissive temperature, induction of the GAL1 and GAL10 genes is reduced in both spt16-G132D and set3Δ cells, whereas transient upregulation of GAL10 noncoding RNA (ncRNA), which is transcribed from the 3' end of the GAL10 gene, is elevated. Mutations that inhibit GAL10 ncRNA transcription reverse the GAL1 and GAL10 induction defects in spt16-G132D and set3Δ mutant cells. Mechanistically, set3Δ and FACT (spt16-G132D) mutants show reduced histone acetylation and increased nucleosome occupancy at the GAL1 promoter under inducing conditions and inhibition of GAL10 ncRNA transcription also partially reverses these chromatin changes. These results indicate that FACT interacts with Set3C, which in turn prevents uncontrolled GAL10 ncRNA expression and fine-tunes the expression of GAL genes upon a change in carbon source.