The SET- and chromo-domains are recognized as signature motifs for proteins that contribute to epigenetic control of gene expression through effects on the regional organization of chromatin structure. This paper reports the identification of a novel subgroup of SET-domain-containing proteins in tobacco and Arabidopsis, which show highest homologies with the Drosophila position-effect-variegation repressor protein SU(VAR)3-9 and the yeast centromer silencing protein CLR4. The tobacco SET-domain-containing protein (NtSET1) was fused to the green fluorescence protein (GFP) that serves as a visual marker for localization of the recombinant protein in living cells. Whereas control GFP protein alone was uniformly dispersed within the nucleus and cytoplasm, the NtSET1-GFP fusion protein showed a non-uniform localization to multiple nuclear regions in interphase tobacco TBY2 cells. During mitosis, the NtSET1-GFP associated with condensed chromosomes with a non-random distribution. The NtSET1 thus appears to have distinct target regions in the plant chromatin. Overexpression of the NtSET1-GFP in transgenic tobacco inhibited plant growth, implicating the possible involvement of the NtSET1 in transcriptional repression of growth control genes through the formation of higher-order chromatin domains.