The split-ubiquitin assay detects protein interactions in vivo. To identify proteins interacting with Gal4p and Tup1p, two transcriptional regulators, we converted the split-ubiquitin assay into a generally applicable screen for binding partners of specific proteins in vivo. A library of genomic Saccharomyces cerevisiae DNA fragments fused to the N-terminal half of ubiquitin was constructed and transformed into yeast strains carrying either Gal4p or Tup1p as a bait. Both proteins were C-terminally extended by the C-terminal half of ubiquitin followed by a modified Ura3p with an arginine in position 1, a destabilizing residue in the N-end rule pathway. The bait fusion protein alone is stable and enzymatically active. However, upon interaction with its prey, a native-like ubiquitin is reconstituted. RUra3p is then cleaved off by the ubiquitin-specific proteases and rapidly degraded by the N-end rule pathway. In both screens, Nhp6B was identified as a protein in close proximity to Gal4p as well as to Tup1p. Direct interaction between either protein and Nhp6B was confirmed by coprecipitation assays. Genetic analysis revealed that Nhp6B, a member of the HMG1 family of DNA-binding proteins, can influence transcriptional activation as well as repression at a specific locus in the chromosome of the yeast S. cerevisiae.