Heterochromatin in metazoans induces transcriptional silencing, as exemplified by position effect variegation in Drosophila melanogaster and X-chromosome inactivation in mammals. Heterochromatic DNA is packaged in nucleosomes that are distinct in their acetylation pattern from those present in euchromatin, although the role these differences play in the structure of heterochromatin or in the effects of heterochromatin on transcriptional activity is unclear. Here we report that, as observed in the facultative heterochromatin of the inactive X chromosome in female mammalian cells, histones H3 and H4 in chromatin spanning the transcriptionally silenced mating-type cassettes of the yeast Saccharomyces cerevisiae are hypoacetylated relative to histones H3 and H4 of transcriptionally active regions of the genome. By immunoprecipitation of chromatin fragments with antibodies specific for H4 acetylated at particular lysine residues, we found that only three of the four lysine residues in the amino-terminal domain of histone H4 spanning the silent cassettes are hypoacetylated. Lysine 12 shows significant acetylation levels. This is identical to the pattern of histone H4 acetylation observed in centric heterochromatin of D. melanogaster. These two observations provide additional evidence that the silent cassettes are encompassed in the yeast equivalent of metazoan heterochromatin. Further, mutational analysis of the amino-terminal domain of histone H4 in S. cerevisiae demonstrated that this observed pattern of histone H4 acetylation is required for transcriptional silencing. This result, in conjunction with prior mutational analyses of yeast histones H3 and H4, indicates that the particular pattern of nucleosome acetylation found in heterochromatin is required for its effects on transcription and is not simply a side effect of heterochromatin formation.