PARP-1 is involved in multiple cellular processes, including transcription, DNA repair, and apoptosis. PARP-1 attaches ADP-ribose units to target proteins, including itself as a post-translational modification that can change the biochemical properties of target proteins and mediate recruitment of proteins to sites of poly(ADP-ribose) synthesis. Independent of its catalytic activity, PARP-1 binds to chromatin and promotes compaction affecting RNA polymerase II transcription. PARP-1 has a modular structure composed of six independent domains. Two homologous zinc fingers, Zn1 and Zn2, form the DNA-binding module. Zn1-Zn2 binding to DNA breaks triggers catalytic activity. Recently, we have identified a third zinc binding domain in PARP-1, the Zn3 domain, which is essential for DNA-dependent PARP-1 activity. The crystal structure of the Zn3 domain revealed a novel zinc-ribbon fold and a homodimeric Zn3 structure that formed in the crystal lattice. Structure-guided mutagenesis was used here to investigate the roles of these two features of the Zn3 domain. Our results indicate that the zinc-ribbon fold of the Zn3 domain mediates an interdomain contact crucial to assembly of the DNA-activated conformation of PARP-1. In contrast, residues located at the Zn3 dimer interface are not required for DNA-dependent activation but rather make important contributions to the chromatin compaction activity of PARP-1. Thus, the Zn3 domain has dual roles in regulating the functions of PARP-1.