HMGN1 is a nuclear protein that binds to nucleosomes and alters the accessibility of regulatory factors to their chromatin targets. To elucidate its biological function and identify specific HMGN1 target genes, we generated Hmgn1–/– mice. DNA microarray analysis of Hmgn1+/+ and Hmgn1–/– embryonic fibroblasts identified N-cadherin as a potential HMGN1 gene target. RT-PCR and western blot analysis confirmed a linkage between HMGN1 expression and N-cadherin levels. In both transformed and primary mouse embryonic fibroblasts (MEFs), HMGN1 acted as negative regulator of N-cadherin expression. Likewise, the N-cadherin levels in early embryos of Hmgn1–/– mice were higher than those of their Hmgn1+/+ littermates. Loss of HMGN1 increased the adhesiveness, motility and aggregation potential of Hmgn1–/– MEFs, a phenotype consistent with increased levels of N-cadherin protein. Re-expression of wild-type HMGN1, but not of the mutant HMGN1 protein that does not bind to chromatin, in Hmgn1–/– MEFs, decreased the levels of N-cadherin and restored the Hmgn1+/+ phenotype. These studies demonstrate a role for HMGN1 in the regulation of specific gene expression. We suggest that in MEFs, and during early mouse development, the interaction of HMGN1 with chromatin down-regulates the expression of N-cadherin.