The organization of eukaryotic genomes requires a harmony between efficient compaction and accessibility. This is achieved through its packaging into chromatin. Chromatin can be subdivided into two general structural and functional compartments: euchromatin and heterochromatin. Euchromatin comprises most of the expressed genome, while heterochromatin participates intimately in the production of structures such as centromeres and telomeres essential for chromosome function. Studies in the fission yeast Schizosaccharomyces pombe have begun to highlight the genetic pathways critical for the assembly and epigenetic maintenance of heterochromatin, including key roles played by the RNAi machinery, H3 lysine 9 methylation and heterochromatin protein 1 (HP1). Recent studies have also identified a novel E3 ubiquitin ligase universally required for H3 K9 methylation. Here we outline these studies and propose several models for the role of this E3 ligase in heterochromatin assembly.