The telomeres and mating-type loci of budding yeast adopt a condensed, heterochromatin-like state through recruitment of the silent information regulator (SIR) proteins SIR2p, SIR3p, and SIR4p. In this study we characterize the chromatin binding determinants of recombinant SIR3p and identify how SIR3p mediates chromatin fiber condensation in vitro. Purified full-length SIR3p was incubated with naked DNA, nucleosome core particles, or defined nucleosomal arrays, and the resulting complexes were analyzed by electrophoretic shift assays, sedimentation velocity, and electron microscopy. SIR3p bound avidly to all three types of templates. SIR3p loading onto its nucleosomal sites in chromatin produced thickened condensed fibers that retained a beaded morphology. At higher SIR3p concentrations, individual nucleosomal arrays formed oligomeric suprastructures bridged by SIR3p oligomers. When condensed SIR3p-bound chromatin fibers were incubated in Mg(2+), they folded and oligomerized even further to produce hypercondensed higher-order chromatin structures. Collectively, these results define how SIR3p may function as a chromatin architectural protein and provide new insight into the interplay between endogenous and protein-mediated chromatin fiber condensation pathways.