Polycomb group (PcG) proteins are required for maintaining the silent state of the homeotic genes and other important developmental regulators. The silencing function of the PcG proteins has been linked to their intrinsic histone modifying enzymatic activities. The EED-EZH2 complex, containing the core subunits EZH2, EED, SUZ12, and RbAp48, functions as a histone H3K27-specific methyltransferase. Here we describe the identification and characterization of a related EED-EZH2 protein complex which is distinguished from the previous complex by the presence of another PcG protein, hPHF1. Consistent with the ability of hPHF1 to stimulate the enzymatic activity of the core EED-EZH2 complex in vitro, manipulation of mPcl1, the mouse counterpart of hPHF1, in NIH 3T3 cells and cells of the mouse male germ cell line GC1spg results in global alteration of H3K27me2 and H3K27me3 levels and Hox gene expression. Small interfering RNA-mediated knockdown of mPcl1 affects association of the Eed-Ezh2 complex with certain Hox genes, such as HoxA10, as well as Hox gene expression concomitant with an alteration on the H3K27me2 levels of the corresponding promoters. Therefore, our results reveal hPHF1 as a component of a novel EED-EZH2 complex and demonstrate its important role in H3K27 methylation and Hox gene silencing. Copyright © 2008, American Society for Microbiology. All Rights Reserved.