Our group has continued studies of chromatin structure and the regulation of eukaryotic gene expression. This year we have made significant progress towards understanding the biology of ATP-dependent chromatin remodeling by NURF (Nucleosome Remodeling Factor) in the mouse. We have generated and analyzed mutants for the largest subunit of NURF, and found that NURF is required for early embryonic development until embryonic day 5-6. Analysis of molecular markers by in situ hybridization indicates that NURF may be functioning as part of the nodal/TGF beta signaling pathway to chromatin. Molecular studies show that NURF can physically interact with the SMAD transcription factor, this providing a model by which TGF-beta activation of SMADs leads to NURF recruitment and nucleosome remodeling at target gene promoters.We are also making excellent progress on studies of the SWR1 complex, a member of the SWI2/SNF2 superfamily of chromatin remodeling enzymes. We established a new link between the SWR1 complex and a specific histone variant H2AZ. Histone variant H2AZ is incorporated preferentially at specific locations in eukaryotic chromatin, where it modulates chromosome functions. In S. cerevisiae, deposition of histone H2AZ is mediated by the multi-protein SWR1 complex, which catalyzes ATP-dependent exchange of nucleosomal histone H2A for H2AZ. We have discovered a new histone chaperone for the H2AZ variant, which binds the H2AZ-H2B dimers in a 1:1 ratio. Genetic and biochemical studies indicate that H2AZ is stabilized by multiple histone chaperones which bind redundantly to deliver the histone variant to the SWR1 enzyme complex. Our findings provide insight into the earliest stage of histone variant exchange.