HP1 is a conserved chromosomal protein, first discovered in Drosophila, which is predominantly associated with the heterochromatin of many organisms. Recently, it has been shown that HP1 is required for telomere capping, telomere elongation, and transcriptional repression of telomeric sequences. Several studies have suggested a model for heterochromatin formation and epigenetic gene silencing in different species that is based on interactions among histone methyltransferases (HMTases), histone H3 methylated at lysine 9 (H3-MeK9), and the HP1 chromodomain. This model has been extended to HP1 telomeric localization by data showing that H3-MeK9 is present at all of the telomeres. Here, we tested this model, and we found that the capping function of HP1 is due to its direct binding to telomeric DNA, while the silencing of telomeric sequences and telomere elongation is due to its interaction with H3-MeK9.