The HIR complex, which is comprised of the four proteins Hir1, Hir2, Hir3 and Hpc2, was first characterized as a repressor of three of the four histone gene loci in Saccharomyces cerevisiae. Using a bioinformatical approach, previous studies have identified a region of Hpc2 that is conserved in Schizosaccharomyces pombe and humans. Using a similar approach, we identified two additional domains, CDI and CDII, of the Hpc2 protein that are conserved among yeast species related to S. cerevisiae. We showed that the N terminal CDI domain (spanning amino acids 63-79) is dispensable for HIR complex assembly, but plays an essential role in the repression of the histone genes by recruiting the HIR complex to the HIR-dependent histone gene loci. The second conserved domain, CDII (spanning amino acids 452-480), is required for the stability of the Hpc2 protein itself as well as for the assembly of the HIR complex. In addition, we report a novel separation-of-function mutation within CDI of Hpc2, which causes derepression of the histone genes but does not confer other reported hir/hpc- phenotypes (such as Spt phenotypes, heterochromatin silencing defects and repression of cryptic promoters). This is the first direct demonstration that a separation-of-function mutation exists within the HIR complex.