In eukaryotic cells the histone methylase SUV39H1 and the methyl-lysine binding protein HP1 functionally interact to repress transcription at heterochromatic sites. Lysine 9 of histone H3 is methylated by SUV39H1 (ref. 2), creating a binding site for the chromo domain of HP1 (refs 3, 4). Here we show that SUV39H1 and HP1 are both involved in the repressive functions of the retinoblastoma (Rb) protein. Rb associates with SUV39H1 and HP1 in vivo by means of its pocket domain. SUV39H1 cooperates with Rb to repress the cyclin E promoter, and in fibroblasts that are disrupted for SUV39, the activity of the cyclin E and cyclin A2 genes are specifically elevated. Chromatin immunoprecipitations show that Rb is necessary to direct methylation of histone H3, and is necessary for binding of HP1 to the cyclin E promoter. These results indicate that the SUV39H1-HP1 complex is not only involved in heterochromatic silencing but also has a role in repression of euchromatic genes by Rb and perhaps other co-repressor proteins.