The dynamic architecture of chromatin is vital for proper cellular function, and is maintained by the concerted action of numerous nuclear proteins, including that of the linker histone H1 variants, the most abundant family of nucleosome-binding proteins. Here we show that the nuclear protein HP1BP3 is widely expressed in most vertebrate tissues and is evolutionarily and structurally related to the H1 family. HP1BP3 contains three globular domains and a highly positively charged C-terminal domain, resembling similar domains in H1. Fluorescence recovery after photobleaching (FRAP) studies indicate that like H1, binding of HP1BP3 to chromatin depends on both its C and N terminal regions and is affected by the cell cycle and post translational modifications. HP1BP3 contains functional motifs not found in H1 histones, including an acidic stretch and a consensus HP1-binding motif. Transcriptional profiling of HeLa cells lacking HP1BP3 showed altered expression of 383 genes, suggesting a role for HP1BP3 in modulation of gene expression. Significantly, Hp1bp3-/- mice present a dramatic phenotype with 60% of pups dying within 24 h of birth and the surviving animals exhibiting a lifelong 20% growth retardation. We suggest that HP1BP3 is a ubiquitous histone H1 like nuclear protein with distinct and non-redundant functions necessary for survival and growth.