Several families of transposable elements (TEs), most of them belonging to the retrotransposon category, are particularly enriched in Drosophila melanogaster constitutive heterochromatin. The enrichment of TE-homologous sequences into heterochromatin is not a peculiar feature of the Drosophila genome, but appears to be widespread among higher eukaryotes. The constitutive heterochromatin of D. melanogaster contains several genetically active domains; this raises the possibility that TE-homologous sequences inserted into functional heterochromatin compartments may be expressed. In this review, I present available data on the genetic and molecular organization of D. melanogaster constitutive heterochromatin and its relationship with transposable elements. The implications of these findings on the possible impact of heterochromatic TEs on the function and evolution of the host genome are also discussed.