Spt5 C-terminal repeat domain phosphorylation and length negatively regulate heterochromatin through distinct mechanisms

Heterochromatin is a condensed chromatin structure that represses transcription of repetitive DNA elements and developmental genes, and is required for genome stability. Paradoxically, transcription of heterochromatic sequences is required for establishment of heterochromatin in diverse eukaryotic species. As such, components of the transcriptional machinery can play important roles in establishing heterochromatin. How these factors coordinate with heterochromatin proteins at nascent heterochromatic transcripts remains poorly understood. In the model eukaryote Schizosaccharomyces pombe (S. pombe), heterochromatin nucleation can be coupled to processing of nascent transcripts by the RNA interference (RNAi) pathway, or to other post-transcriptional mechanisms that are RNAi-independent. Here we show that the RNA polymerase II processivity factor Spt5 negatively regulates heterochromatin in S. pombe through its C-terminal domain (CTD). The Spt5 CTD is analogous to the CTD of the RNA polymerase II large subunit, and is comprised of multiple repeats of an amino acid motif that is phosphorylated by Cdk9. We provide evidence that genetic ablation of Spt5 CTD phosphorylation results in aberrant RNAi-dependent nucleation of heterochromatin at an ectopic location, as well as inappropriate spread of heterochromatin proximal to centromeres. In contrast, truncation of Spt5 CTD repeat number enhanced RNAi-independent heterochromatin formation and bypassed the requirement for RNAi. We relate these phenotypes to the known Spt5 CTD-binding factor Prf1/Rtf1. This separation of function argues that Spt5 CTD phosphorylation and CTD length restrict heterochromatin through unique mechanisms. More broadly, our findings argue that length and phosphorylation of the Spt5 CTD repeat array have distinct regulatory effects on transcription. Formation of transcriptionally silent heterochromatin involves deposition of repressive histone modifications such as methylated histone H3 lysine 9 (H3K9me), which creates a compact, inaccessible chromatin state. Paradoxically, deposition of H3K9me can involve transcription at the target locus. How the molecular machinery that forms heterochromatin interfaces with the transcription apparatus remains unclear. In the fission yeast S. pombe, H3K9me deposition is coupled to engagement of nascent heterochromatic transcripts by the RNA interference (RNAi) pathway, as well as RNAi-independent mechanisms. We show that heterochromatin formation in this system is negatively regulated by the ancient elongation factor Spt5 through its C-terminal repeat domain (CTD). We demonstrate that phosphorylation of the CTD by Cdk9 restricts inappropriate action of the RNAi pathway at euchromatic locations, whereas the length of the repeat array restricts RNAi-independent heterochromatin formation. Thus, different alleles of the same gene impact heterochromatin through distinct mechanisms. Our findings suggest that Spt5 is a key modulator of transcription-coupled heterochromatin establishment and have implications for the role of the CTD in transcriptional regulation.