The centromere is a unique chromosomal locus that ensures accurate segregation of chromosomes during cell division by directing the assembly of a multiprotein complex, the kinetochore(1). The centromere is marked by a conserved variant of conventional histone H3 termed CenH3 or CENP-A (ref. 2). A conserved motif of CenH3, the CATD, defined by loop 1 and helix 2 of the histone fold, is necessary and sufficient for specifying centromere functions of CenH3 (refs 3, 4). The structural basis of this specification is of particular interest. Yeast Scm3 and human HJURP are conserved non-histone proteins that interact physically with the (CenH3-H4) 2 heterotetramer and are required for the deposition of CenH3 at centromeres in vivo(5-13). Here we have elucidated the structural basis for recognition of budding yeast (Saccharomyces cerevisiae) CenH3 (called Cse4) by Scm3. We solved the structure of the Cse4-binding domain (CBD) of Scm3 in complex with Cse4 and H4 in a single chain model. An alpha-helix and an irregular loop at the conserved amino terminus and a shorter alpha-helix at the carboxy terminus of Scm3(CBD) wraps around the Cse4-H4 dimer. Four Cse4-specific residues in the N-terminal region of helix 2 are sufficient for specific recognition by conserved and functionally important residues in the N-terminal helix of Scm3 through formation of a hydrophobic cluster. Scm3(CBD) induces major conformational changes and sterically occludes DNA-binding sites in the structure of Cse4 and H4. These findings have implications for the assembly and architecture of the centromeric nucleosome.