The SNF2h-containing chromatin-remodeling complex NoRC is responsible for silencing a fraction of mammalian rRNA genes (rDNA). NoRC silences transcription by establishing heterochromatic features-including DNA methylation, hypoacetylation of histone H4, and methylation of H3K9-at the rDNA promoter . We have investigated the mechanism of NoRC-mediated rDNA silencing and show that binding of the bromodomain of TIP5, the large subunit of NoRC, to acetylated nucleosomes is a prerequisite for NoRC function. A point mutation within the bromodomain impairs the association of NoRC with chromatin, prevents heterochromatin formation, and abolishes transcriptional repression. Moreover, the association of NoRC with chromatin requires acetylation of histone H4 at lysine 16 (acH4K16), and binding to acH4K16 is required for subsequent deacetylation of H4K5, H4K8, and H4K12, indicating that acetylation of H4K16 plays an active role in NoRC-mediated heterochromatin formation. The bromodomain cooperates with an adjacent PHD finger to recruit HDAC1, DNMT1, DNMT3, and SNF2h to rDNA. If specifically targeted to the rDNA promoter, the PHD finger/bromodomain is capable of establishing heterochromatic features and rDNA silencing. Thus, the PHD finger/bromodomain represents an autonomous unit that binds to acH4K16 and coordinates the chain of events that establish the repressed state of rDNA.