The protein stability and chromatin functions of UHRF1 (ubiquitin-like, containing PHD and RING finger domains, 1) are regulated in a cell-cycle-dependent manner. We report a structural characterization of the complex between UHRF1 and the deubiquitinase USP7. The first two UBL domains of USP7 bind to the polybasic region (PBR) of UHRF1, and this interaction is required for the USP7-mediated deubiquitination of UHRF1. Importantly, we find that the USP7-binding site of the UHRF1 PBR overlaps with the region engaging in an intramolecular interaction with the N-terminal tandem Tudor domain (TTD). We show that the USP7-UHRF1 interaction perturbs the TTD-PBR interaction of UHRF1, thereby shifting the conformation of UHRF1 from a TTD-"occluded" state to a state open for multivalent histone binding. Consistently, introduction of a USP7-interaction-defective mutation to UHRF1 significantly reduces its chromatin association. Together, these results link USP7 interaction to the dynamic deubiquitination and chromatin association of UHRF1.

Trimethylated histone H3 lysine 27 (H3K27me3) regulates gene repression, cell-fate determination and differentiation. We report that a conserved bromo-adjacent homology (BAH) module of BAHCC1 (BAHCC1^BAH) 'recognizes' H3K27me3 specifically and enforces silencing of H3K27me3-demarcated genes in mammalian cells. Biochemical, structural and integrated chromatin immunoprecipitation-sequencing-based analyses demonstrate that direct readout of H3K27me3 by BAHCC1 is achieved through a hydrophobic trimethyl-L-lysine-binding 'cage' formed by BAHCC1^BAH, mediating colocalization of BAHCC1 and H3K27me3-marked genes. BAHCC1 is highly expressed in human acute leukemia and interacts with transcriptional corepressors. In leukemia, depletion of BAHCC1, or disruption of the BAHCC1^BAH-H3K27me3 interaction, causes derepression of H3K27me3-targeted genes that are involved in tumor suppression and cell differentiation, leading to suppression of oncogenesis. In mice, introduction of a germline mutation at Bahcc1 to disrupt its H3K27me3 engagement causes partial postnatal lethality, supporting a role in development. This study identifies an H3K27me3-directed transduction pathway in mammals that relies on a conserved BAH 'reader'.