Heterochromatin protein 1 Hsalpha (HP1(Hsalpha)) is one of three human proteins that share sequence similarity with Drosophila HP1. HP1 proteins are enriched at centric heterochromatin and play a role in chromatin packaging and gene regulation. In humans, HP1(Hsalpha) is down-regulated in highly invasive/metastatic breast cancer cells, compared to poorly invasive/non-metastatic breast cancer cells. To gain insight into this differential regulation, we have cloned the HP1(Hsalpha) gene and characterized its genomic region. HP1(Hsalpha) is located on human chromosome 12q13.13, 589 bp upstream of the divergently transcribed hnRNPA1 gene. Analysis of the promoter region revealed that differential regulation of HP1(Hsalpha) between the two types of breast cancer cells is lost upon mutation of an USF/c-myc transcription factor binding site located 172 bp upstream of the predicted HP1(Hsalpha) transcription start site. These findings provide insights into the down-regulation of HP1(Hsalpha) in highly invasive/metastatic breast cancer cells. To examine the functional properties of HP1(Hsalpha), experiments were performed using Drosophila melanogaster as a genetic system. When human HP1(Hsalpha) was expressed in transgenic Drosophila, silencing of reporter genes inserted at centric and telomeric locations was enhanced. Furthermore, expression of HP1(Hsalpha) rescued the lethality of homozygous Su(var)2-5 mutants lacking HP1. Taken together, these results demonstrate the participation of HP1(Hsalpha) in silent chromatin formation and that HP1(Hsalpha) is a functional homologue of Drosophila HP1.