Genetic and biochemical evidence suggests that the conserved yeast Snf/Swi complex rearranges nucleosome structure to facilitate transcriptional activation of a variety of genes. In a functional dissection of one of the Snf/Swi components, Snf5p, we show that an internal region of the protein is necessary and sufficient for Snf5 function. Moreover, this region is well conserved in all members of a new Snf5 family, which includes representatives from human (Ini1/hSnf5), Drosophila (Snr1), S. pombe, and C. elegans. We have cloned a new member of this family from S. cerevisiae, SFH1 (Snf Five Homolog), and demonstrated that SFH1 is essential for mitotic growth of cells. A bifunctional LexA-Sfh1 fusion protein activates transcription strongly when bound to DNA. The functions of Sfh1p and Snf5p however, appear to be distinct. Neither SFH1 nor SNF5 in multicopy can complement mutations in the other gene. An sfh1 allele that results in truncation of the protein exerts a conditional temperature-sensitive phenotype on cells. sfh1-1ts mutants arrest at the restrictive temperature with an accumulation of large-budded cells, suggesting a defect in G2/M progression, a phenotype very similar to that seen in cells carrying a temperature sensitive mutation in an essential S. cerevisiae SNF2 homolog, STH1. We show that Sfh1 and Sth1 proteins interact in vivo and in vitro, suggesting that they are components of a protein complex.