Investigations aimed at identifying regulators of nuclear architecture in Drosophila demonstrated that cells lacking H3K9 methylation and RNA interference (RNAi) pathway components displayed disorganized nucleoli, ribosomal DNA (rDNA) and satellite DNAs. The levels of H3K9 dimethylation (H3K9me2) in chromatin associated with repeated DNAs decreased dramatically in Su(var)3-9 and dcr-2 (dicer-2) mutant tissues compared with wild type. We also observed a substantial increase in extrachromosomal circular (ecc) repeated DNAs in mutant tissues. The disorganized nucleolus phenotype depends on the presence of Ligase 4 and ecc DNA formation is not induced by removal of cohesin. We conclude that the structural integrity and organization of repeated DNAs and nucleoli are regulated by the H3K9 methylation and RNAi pathways, and other regulators of heterochromatin-mediated silencing. In addition, repeated DNA stability involves suppression of non-homologous end joining (NHEJ) or other recombination pathways. These results suggest a mechanism for how local chromatin structure can regulate genome stability, and the organization of chromosomal elements and nuclear organelles.