Abstract: Methylation of histone proteins is one of their many modifications that affect chromatin structure and regulate gene expression. Methylation of histone H3 on lysines 4 and 79, catalyzed by the Set1-containing complex COMPASS and Dot1p, respectively, is required for silencing of expression of genes located near chromosome telomeres in yeast. We report that the Paf1 protein complex, which is associated with the elongating RNA polymerase II, is required for methylation of lysines 4 and 79 of histone H3 and for silencing of expression of a telomere-associated gene. We show that the Paf1 complex is required for recruitment of the COMPASS methyltransferase to RNA polymerase II and that the subunits of these complexes interact physically and genetically. Collectively, our results suggest that the Paf1 complex is required for histone H3 methylation, therefore linking transcriptional elongation to chromatin methylation.