Heterochromatin Protein 1 (HP1a) is a well-known conserved protein involved in heterochromatin formation and gene silencing in different species including humans. A general model has been proposed for heterochromatin formation and epigenetic gene silencing in different species that implies an essential role for HP1a. According to the model, histone methyltransferase enzymes (HMTases) methylate the histone H3 at lysine 9 (H3K9me), creating selective binding sites for itself and the chromodomain of HP1a. This complex is thought to form a higher order chromatin state that represses gene activity. It has also been found that HP1a plays a role in telomere capping. Surprisingly, recent studies have shown that HP1a is present at many euchromatic sites along polytene chromosomes of Drosophila melanogaster, including the developmental and heat-shock-induced puffs, and that this protein can be removed from these sites by in vivo RNase treatment, thus suggesting an association of HP1a with the transcripts of many active genes. To test this suggestion, we performed an extensive screening by RIP-chip assay (RNA-immunoprecipitation on microarrays), and we found that HP1a is associated with transcripts of more than one hundred euchromatic genes. An expression analysis in HP1a mutants shows that HP1a is required for positive regulation of these genes. Cytogenetic and molecular assays show that HP1a also interacts with the well known proteins DDP1, HRB87F, and PEP, which belong to different classes of heterogeneous nuclear ribonucleoproteins (hnRNPs) involved in RNA processing. Surprisingly, we found that all these hnRNP proteins also bind heterochromatin and are dominant suppressors of position effect variegation. Together, our data show novel and unexpected functions for HP1a and hnRNPs proteins. All these proteins are in fact involved both in RNA transcript processing and in heterochromatin formation. This suggests that, in general, similar epigenetic mechanisms have a significant role on both RNA and heterochromatin metabolisms.