Heterochromatin represents a cytologically visible state of heritable gene repression. In the yeast, Schizosaccharomyces pombe, the swi6 gene encodes a heterochromatin protein 1 (HP1)-like chromodomain protein that localizes to heterochromatin domains, including the centromeres, telomeres, and the donor mating-type loci, and is involved in silencing at these loci. We identify here the functional domains of swi6p and demonstrate that the chromodomain from a mammalian HP1-like protein, M31, can functionally replace that of swi6p, showing that chromodomain function is conserved from yeasts to humans. Site-directed mutagenesis, based on a modeled three-dimensional structure of the swi6p chromodomain, shows that the hydrophobic amino acids which lie in the core of the structure are critical for biological function. Gel filtration, gel overlay experiments, and mass spectroscopy show that HP1 proteins can self-associate, and we suggest that it is as oligomers that HP1 proteins are incorporated into heterochromatin complexes that silence gene activity.