The histone variant H2A.Z plays an essential role in metazoans but its function remains to be determined. Here, we developed a new inducible RNAi strategy to elucidate the role of H2A.Z in mammalian cell lines. We show that in the absence of H2A.Z, the genome becomes highly unstable and that this instability is caused by defects in the chromosome segregation process. Analysis of H2A.Z localization reveals that in these cells it is enriched at heterochromatic foci with HP1alpha on the arms of chromosomes but not at centromeric regions. When H2A.Z is depleted, normal HP1alpha-chromatin interactions are disrupted on the chromosomal arms and, notably, also at pericentric regions. Therefore, H2A.Z controls the localization of HP1alpha. We conclude that H2A.Z is essential for the accurate transmission of chromosomes.