Polycomb group (PcG) proteins form multimeric protein complexes which are involved in the heritable stable repression of genes. Previously, we identified two distinct human PcG protein complexes. The EED-EZH protein complex contains the EED and EZH2 PcG proteins, and the HPC-HPH PcG complex contains the HPC, HPH, BMI1, and RING1 PcG proteins. Here we show that YY1, a homolog of the Drosophila PcG protein pleiohomeotic (Pho), interacts specificially with the human PcG protein EED but not with proteins of the HPC-HPH PcG complex. Since YY1 and Pho are DNA-binding proteins, the interaction between YY1 and EED provides a direct link between the chromatin-associated EED-EZH PcG complex and the DNA of target genes. To study the functional significance of the interaction, we expressed the Xenopus homologs of EED and YY1 in Xenopus embryos. Both Xeed and XYY1 induce an ectopic neural axis but do not induce mesodermal tissues. In contrast, members of the HPC-HPH PcG complex do not induce neural tissue. The exclusive, direct neuralizing activity of both the Xeed and XYY1 proteins underlines the significance of the interaction between the two proteins. Our data also indicate a role for chromatin-associated proteins, such as PcG proteins, in Xenopus neural induction.