The Townes-Brocks syndrome (TBS) is an autosomal dominantly inherited malformation syndrome presenting as an association of imperforate anus, triphalangeal and supernumerary thumbs, malformed ears and sensorineural hearing loss. Mutations in SALL1, a gene mapping to 16q12.1, were identified as a cause for TBS. To elucidate how SALL1 mutations lead to TBS, we have performed a series of functional studies with the SALL1 protein. Using epifluorescence and confocal microscopy it could be shown that a GFP-SALL1 fusion protein localizes to chromocenters and smaller heterochromatin foci in transiently transfected NIH-3T3 cells. Chromocenters consist of clustered pericentromeric heterochromatin and contain telomere sequences. Indirect immunofluorescence revealed a partial colocalization of GFP-SALL1 with M31, the mouse homolog of the Drosophila heterochromatic protein HP1. It was further demonstrated that SALL1 acts as a strong transcriptional repressor in mammalian cells. Transcriptional repression could not be relieved by the addition of the histone deacetylase inhibitor Trichostatin-A. In a yeast two-hybrid screen we identified PIN2, an isoform of telomere-repeat-binding factor 1 (TRF1), as an interaction partner of SALL1, and showed that the N-terminus of SALL1 is not necessary for the interaction with PIN2/TRF1. The interaction was confirmed in vitro in a GST-pulldown assay. The association of the developmental regulator SALL1 with heterochromatin is striking and unexpected. Our results propose an involvement of SALL1 in the regulation of higher order chromatin structures and indicate that the protein might be a component of a distinct heterochromatin-dependent silencing process. We have also provided new evidence that there is a close functional link between the centromeric and telomeric heterochromatin domains not only in Drosophila and yeast, but also in mammalian cells.