Inner nuclear membrane proteins containing a LEM (LAP2, emerin, and MAN1) domain participate in different processes, including chromatin organization, gene expression, and nuclear envelope biogenesis. In this study, we identify a robust genetic interaction between transcription export (TREX) factors and yeast Src1, an integral inner nuclear membrane protein that is homologous to vertebrate LEM2. DNA macroarray analysis revealed that the expression of the phosphate-regulated genes PHO11, PHO12, and PHO84 is up-regulated in src1Δ cells. Notably, these PHO genes are located in subtelomeric regions of chromatin and exhibit a perinuclear location in vivo. Src1 spans the nuclear membrane twice and exposes its N and C domains with putative DNA-binding motifs to the nucleoplasm. Genome-wide chromatin immunoprecipitation–on-chip analyses indicated that Src1 is highly enriched at telomeres and subtelomeric regions of the yeast chromosomes. Our data show that the inner nuclear membrane protein Src1 functions at the interface between subtelomeric gene expression and TREX-dependent messenger RNA export through the nuclear pore complexes.