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RNase H2 is a specialized enzyme that degrades RNA in RNA/DNA hybrids and deficiency of this enzyme causes a severe neuroinflammatory disease, Aicardi Goutières syndrome (AGS). However, the molecular mechanism underlying AGS is still unclear. Here, we show that RNase H2 is associated with a subset of genes, in a transcription-dependent manner where it interacts with RNA Polymerase II. RNase H2 depletion impairs transcription leading to accumulation of R-loops, structures that comprise RNA/DNA hybrids and a displaced DNA strand, mainly associated with short and intronless genes. Importantly, accumulated R-loops are processed by XPG and XPF endonucleases which leads to DNA damage and activation of the immune response, features associated with AGS. Consequently, we uncover a key role for RNase H2 in the transcription of human genes by maintaining R-loop homeostasis. Our results provide insight into the mechanistic contribution of R-loops to AGS pathogenesis. RnaseH2 is mutated in severe neuro-inflammatory disorder Aicardi‐Goutières syndrome. Here the authors reveal that RNase H2 controls cellular R-loop homeostasis to promote transcription, genome integrity and prevent R-loop-associated inflammation.

The chromosomal protein SMCHD1 is a GHKL ATPase that plays important roles in epigenetic silencing, including on the inactive X chromosome (Xi) and at the D4Z4 macrosatellite linked to regulation of DUX4 expression in the disorders facioscapulohumeral muscular dystrophy (FSHD2) and Bosma arrhinia micropthalmia syndrome (BAMS). In this study we use live-cell and single-molecule imaging approaches to investigate SMCHD1 interactions with chromatin and its function in epigenetic silencing. We show that chromatin binding of SMCHD1 genome-wide, including on the Xi, is critically dependent on the protein LRIF1 that mediates interaction with H3K9me2/3 modified nucleosomes. Using engineered mutations in the GHKL ATPase domain we show that ATP hydrolysis is required for selective enrichment of SMCHD1 at specific chromatin regions, which is critical for gene silencing on the Xi. A gain-of-function mutation, G137E, that occurs in BAMS patients, results in accelerated Xi recruitment and greater Xi chromosome compaction. Together, our findings advance mechanistic understanding of SMCHD1 function on the Xi and at other target sites in the genome.