Methylation of Lys79 on histone H3 by Dot1p is important for gene silencing. The elongated structure of the conserved core of yeast Dot1p contains an N-terminal helical domain and a seven-stranded catalytic domain that harbors the binding site for the methyl-donor and an active site pocket sided with conserved hydrophobic residues. The S-adenosyl-L-homocysteine exhibits an extended conformation distinct from the folded conformation observed in structures of SET domain histone lysine methyltransferases. A catalytic asparagine (Asn479), located at the bottom of the active site pocket, suggests a mechanism similar to that employed for amino methylation in DNA and protein glutamine methylation. The acidic, concave cleft between the two domains contains two basic residue binding pockets that could accommodate the outwardly protruding basic side chains around Lys79 of histone H3 on the disk-like nucleosome surface. Biochemical studies suggest that recombinant Dot1 proteins are active on recombinant nucleosomes, free of any modifications.