HMG-D is an abundant chromosomal protein associated with condensed chromatin during the first nuclear cleavage cycles of the developing Drosophila embryo. We previously suggested that HMG-D might substitute for the linker histone H1 in the preblastoderm embryo and that this substitution might result in the characteristic less compacted chromatin. We have now studied the association of HMG-D with chromatin using a cellfree system for chromatin reconstitution derived from The vertebrate high mobility group proteins of the HMGB class (formerly termed HMG1/2) (1) are relatively abundant nuclear DNA-binding proteins that bend DNA substantially and appear to act primarily as architectural facilitators in the assembly of nucleoprotein complexes (recently reviewed in Refs. 2-4). There is direct evidence that these proteins facilitate the binding of transcription factors to their cognate sites both in vitro and in vivo, but any involvement in the assembly of histone-DNA complexes is less well documented. Circumstantial evidence indicates that certain functions of the vertebrate HMGB proteins (5-7) may parallel those of the linker histone H1 (8). Both have been shown to bind to linker DNA sequences (7, 9, 10), and both stabilize and bind to four-way junctions (11)(12)(13)(14). HMG-D is one of two Drosophila proteins closely related to the vertebrate HMGB proteins but in contrast to these proteins contains only a single HMG DNA-binding domain (6,15,16). The HMG domain is followed by a region that has basic sequences similar to the C-terminal domain of histone H1 and a short C-terminal acidic stretch also seen in HMGB proteins. The NMR structure of the HMG domain from HMG-D is very similar to the previously determined structure of the B domain of HMG1, which revealed the characteristic L-shaped fold formed by three ␣-helices (17-21).High mobility group proteins of the HMGB family bind DNA with little sequence specificity but recognize structural features in DNA (22-24), including cruciforms, kinks, DNA bulges, and bends (22,23,(25)(26)(27)(28). DNA footprint analysis and mutagenesis experiments suggest that HMG domain proteins bind in the minor groove (29). In addition, both crystallization and NMR studies show that HMG-D bending is achieved by the intercalation of hydrophobic residues at two different base steps (21, 30).The addition of histone H1 protein to an extended array of nucleosome core particles promotes its folding into a fiber with an approximate width of 30 nm (31-33). During early Drosophila development, histone H1 is not detectable (34 -36) until nuclear cycles 7/8 (37). Therefore, H1 is not involved in chromatin condensation in these earliest phases of Drosophila development characterized by rapid condensation-decondensation cycles. We have previously suggested that HMG-D could function as a linker protein in the absence of histone H1 in Drosophila (37). In support of this hypothesis, Wolffe and colleagues (10, 38) have postulated a similar role for the Xenopus HMG B1 protein. Thus, as the maternal pool of H...