The name heterochromatin protein 1 (HP1) suggests that this small nuclear factor plays a role in forming heterochromatic domains. It was noticed years ago, however, that the distribution of HP1 on polytene chromosomes was not restricted to chromocenters or telomeres. HP1 was also found, reproducibly, along the euchromatic arms. A possible function in euchromatic gene regulation was postulated. Now, a large body of data has blurred the definition of HP1 as a structural component of heterochromatin, revealing its two-faced nature. Not only do HP1 isoforms have specific binding sites in both heterochromatic and euchromatic domains but they might also participate in the repression and activation of transcription in both compartments.