In the yeast Saccharomyces cerevisiae, the two silent mating-type loci and subtelomeric regions are subjected to a well-characterized form of gene silencing. Establishment of silencing involves the formation of a distinct chromatin state that is refractory to transcription. This structure is established by the action of silent information regulator proteins (Sir2, Sir3, and Sir4) that bind to nucleosomes and initiate the deacetylation of multiple lysine residues in histones H3 and H4. Sir2 protein is a conserved histone deacetylase that is critical for mating-type and telomeric silencing, as well as a Sir3/4-independent form of silencing observed within the ribosomal DNA (rDNA) repeat locus. We report here that sumoylation plays an important role in regulating gene silencing. We show that increased dosage of SIZ2, a SUMO (small ubiquitin-related modifier) ligase, is antagonistic to gene silencing and that this effect is enhanced by mutation of ESC1, whose product is involved in tethering telomeres to the nuclear periphery. We present evidence indicating that an elevated SIZ2 dosage causes reduced binding of Sir2 protein to telomeres. These data support the idea that sumoylation of specific substrates at the nuclear periphery regulates the availability of Sir2 protein at telomeres.