Yeast Hho1p contains two domains, GI and GII, that are homologous to the single globular domain of the linker histone H1 (GH1). We showed previously that the isolated GI and GII domains have different structural stabilities and functional properties. GI, like GH1 and the related GH5, is stably folded at low ionic strength (10 mM sodium phosphate) and gives strong protection of chromatosome-length DNA ( approximately 166 bp) during micrococcal nuclease digestion of chromatin. GII is intrinsically unfolded in 10 mM sodium phosphate and gives weak chromatosome protection, but in 250 mM sodium phosphate has a structure very similar to that of GI as determined by NMR spectroscopy. We now show that the loop between helices II and III in GII is the cause of both its instability and its inability to confer strong chromatosome protection. A mutant GII, containing the loop of GI, termed GII-L, is stable in 10 mM sodium phosphate and is as effective as GI in chromatosome protection. Two GII mutants with selected mutations within the original loop were also slightly more stable than GII. In GII, two of the four basic residues conserved at the second DNA binding site ("site II") on the globular domain of canonical linker histones, and in GI, are absent. Introduction of the two "missing" site II basic residues into GII or GII-L destabilised the protein and led to decreased chromatosome protection relative to the protein without the basic residues. In general, the ability to confer chromatosome protection in vitro is closely related to structural stability (the relative population of structured and unstructured states). We have determined the structure of GII-L by NMR spectroscopy. GII-L is very similar to GII folded in 250 mM sodium phosphate, with the exception of the substituted loop region, which, as in GI, contains a single helical turn.