In the yeast Saccharomyces cerevisiae, telomere repeat DNA is assembled into a specialized heterochromatin-like complex that silences the transcription of adjacent genes. The general DNA-binding protein Rap1p binds telomere DNA repeats, contributes to telomere length control and to telomeric silencing, and is a major component of telomeric chromatin. We identified Rap1p localization factor 2 (RLF2) in a screen for genes that alleviate antagonism between telomere and centromere sequences on plasmids. In rlf2 mutants, telomeric chromatin is perturbed: Telomeric silencing is reduced and Rap1p localization is altered. In wild-type cells, Rap1p and telomeres localize to bright perinuclear foci. In rlf2 strains, the number of Rap1p foci is increased, Rap1p staining is more diffuse throughout the nucleus, Rap1p foci are distributed in a much broader perinuclear domain, and nuclear volume is 50% larger. Despite the altered distribution of Rap1p in rlf2 mutant cells, fluorescence in situ hybridization to subtelomeric repeats shows that the distribution of telomeric DNA is similar in wild-type and mutant cells. Thus in rlf2 mutant cells, the distribution of Rap1p does not reflect the distribution of telomeric DNA. RLF2 encodes a highly charged coiled-coil protein that has significant similarity to the p150 subunit of human chromatin assembly factor-I(hCAF-I), a complex that is required for the DNA replication-dependent assembly of nucleosomes from newly synthesized histones in vitro. Furthermore, RLF2 is identical to CAC1, a subunit of yeast chromatin assembly factor-I (yCAF-I) which assembles nucleosomes in vitro. In wild-type cells, epitope-tagged Rlf2p expressed from the GAL10 promoter localizes to the nucleus with a pattern distinct from that of Rap1p, suggesting that Rlf2p is not a component of telomeric chromatin. This study provides evidence that yCAF-I is required for the function and organization of telomeric chromatin in vivo. We propose that Rlf2p facilitates the efficient and timely assembly of histones into telomeric chromatin.