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SUMMARYResearch in our laboratory focuses on two main objectives: 1. We combine the genetic and molecular approaches uniquely available in the yeast Saccharomyces cerevisiae to address fundamental questions about the mechanisms by which eukaryotic activator proteins control gene expression. Recently, we initiated a new project concerning the dynamic exchange of histones within chromatin and its role in transcription regulation and associated epigenetic modifications. The basic building block of chromatin is the nucleosome, which consists of DNA wrapped around an octamer of the four histone proteins H2A, H2B, H3 and H4. We found that while histones H2A and H2B are continuously exchanging genome-wide outside of S phase, histones H3 and H4 only exchange in the promoter regions of active loci. Furthermore, we obtained evidence that an active mechanism prevents histones H3 and H4 from exchanging throughout the body of transcribed genes. These findings raise fundamental questions about the role of these events in regulated gene transcription and associated epigenetic events. Firstly, is the exchange of histones at promoters a cause or a consequence of transcription? Secondly, are some of the histone post-translational modifications typically seen at active promoters required for, or are they a result of, histones exchanging within these regions? Thirdly, what role do the histone chaperones that have been implicated in diverse nucleosome transactions play in this process? The experiments outlined in Part I of the present proposal are meant to provide some answers to these questions.2. We aim at understanding the role of the hepatitis B virus-encoded HBx protein and its interaction with host cell proteins during infection and in the pathogenesis of liver cancer. Chronic infection by hepatitis B virus (HBV) affects more than 350 million people worldwide and is leading cause of hepatocellular carcinoma, one of the most common human cancers. HBV encodes a small regulatory protein, known as HBx, which is essential for viral infection and has been implicated in HBV-mediated liver oncogenesis. The basis for HBx function in either process remains elusive and is the focus of our studies. We obtained structural, biochemical and genetic evidence that HBx stimulates HBV gene expression and causes chromosomal instability in cultured cells by binding to host cell protein DDB1, an essential subunit of an E3 ubiquitin ligase complex implicated in the regulation of diverse cellular functions. Our current results are consistent with HBx exerting its activities by subverting the normal function of the DDB1 E3 ligase complex to target cellular proteins for ubiquitination and, perhaps, subsequent degradation. We now aim to identify the cellular substrate(s) of HBx and further explore the molecular mechanism whereby HBx stimulates HBV gene expression through its association with the E3 ligase. We also wish to investigate the relevance of HBx binding to DDB1 under experimental conditions closer to natural HBV infection. Given the likely fundamental importance of the interaction of HBx and the DDB1 E3 ligase for natural HBV infection and associated liver cancer, this virus-host protein interaction may represent a promising new target for therapeutic intervention.