The yeast RAP1 protein is a sequence-specific DNA-binding protein that functions as both a repressor and an activator of transcription. RAP1 is also involved in the regulation of telomere structure, where its binding sites are found within the terminal poly(C1-3A) sequences. Previous studies have indicated that the regulatory function of RAP1 is determined by the context of its binding site and, presumably, its interactions with other factors. Using the two-hybrid system, a genetic screen for the identification of protein-protein interactions, we have isolated a gene encoding a RAP1-interacting factor (RIF1). Strains carrying gene disruptions of RIF1 grow normally but are defective in transcriptional silencing and telomere length regulation, two phenotypes strikingly similar to those of silencing-defective rap1s mutants. Furthermore, hybrid proteins containing rap1s missense mutations are defective in an interaction with RIF1 in the two-hybrid system. Taken together, these data support the idea that the rap1s phenotypes are attributable to a failure to recruit RIF1 to silencers and telomeres and suggest that RIF1 is a cofactor or mediator for RAP1 in the establishment of a repressed chromatin state at these loci. By use of the two-hybrid system, we have isolated a mutation in RIF1 that partially restores the interaction with rap1s mutant proteins.