The yeast SAS2 (Something About Silencing 2) gene encodes a member of the MYST protein family of histone acetyltransferases (HATs) and is involved in transcriptional silencing at all silent loci (HML, HMR, telomeres, and rDNA) in Saccharomyces cerevisiae. Sas2 is the catalytic subunit of a yeast histone acetyltransferase complex termed SAS complex. The enzymatic activity of SAS complex on free histones has been reported, but nucleosomal HAT activity has not yet been documented. Here we show that the native yeast SAS complex is a small trimeric protein complex composed solely of Sas2, Sas4, and Sas5 with a molecular mass of about 125 kDa. It is capable of acetylating both free histones and nucleosomes, although the nucleosomal HAT activity of SAS complex is very weak when compared with that of NuA4, the other member of MYST HAT complex. We also demonstrate that the putative acetyl CoA binding motif in Sas2 is essential for both the in vivo silencing function and the enzymatic activity of SAS complex. Unlike NuA4, which acetylates all four available lysines at the N-terminal tail of histone H4, SAS complex exclusively acetylates lysine 16 of histone H4 in vitro and is required for the bulk of H4 lysine 16 acetylation in vivo. This specific lysine preference corresponds to the role of SAS complex in antagonizing the spreading of Sir proteins at silent loci in S. cerevisiae.