Heterochromatin Protein 1 (HP1) was first discovered in Drosophila as a dominant suppressor of position-effect variegation and a major component of heterochromatin. The HP1 family is evolutionarily conserved, with members in fungi, plants and animals but not prokaryotes, and there are multiple members within the same species. The amino-terminal chromodomain binds methylated lysine 9 of histone H3, causing transcriptional repression. The highly conserved carboxy-terminal chromoshadow domain enables dimerization and also serves as a docking site for proteins involved in a wide variety of nuclear functions, from transcription to nuclear architecture. In addition to heterochromatin packaging, it is becoming increasingly clear that HP1 proteins have diverse roles in the nucleus, including the regulation of euchromatic genes. HP1 proteins are amenable to posttranslational modifications that probably regulate these distinct functions, thereby creating a subcode within the context of the 'histone code' of histone posttranslational modifications.