All cells that constitute mature tissues in an eukaryotic organism undergo a multistep process of cell differentiation. At the terminal stage of this process, cells either cease to proliferate forever or rest for a very long period of time. During terminal differentiation, most of the genes that are required for cell 'housekeeping' functions, such as proto-oncogenes and other cell-cycle and cell proliferation genes, become stably repressed. At the same time, nuclear chromatin undergoes dramatic morphological and structural changes at the higher-order levels of chromatin organization. These changes involve both constitutively inactive chromosomal regions (constitutive heterochromatin) and the formerly active genes that become silenced and structurally modified to form facultative heterochromatin. Here we approach terminal cell differentiation as a unique system that allows us to combine biochemical, ultrastructural and molecular genetic techniques to study the relationship between the hierarchy of chromatin higher-order structures in the nucleus and its function(s) in dynamic packing of genetic material in a form that remains amenable to regulation of gene activity and other DNA-dependent cellular processes.