A persistent question in epigenetics is how heterochromatin is targeted for assembly at specific domains, and how that chromatin state is faithfully transmitted. Stable heterochromatin is necessary to silence transposable elements (TEs) and maintain genome integrity. Both the RNAi system and heterochromatin components HP1 (Swi6) and H3K9me2/3 are required for initial establishment of heterochromatin structures in S. pombe. Here we utilize both loss of function alleles and the newly developed Drosophila melanogaster transgenic shRNA lines to deplete proteins of interest at specific development stages to dissect their roles in heterochromatin assembly in early zygotes and in maintenance of the silencing chromatin state during development. Using reporters subject to Position Effect Variegation (PEV), we find that depletion of key proteins in the early embryo can lead to loss of silencing assayed at adult stages. The piRNA component Piwi is required in the early embryo for reporter silencing in non-gonadal somatic cells, but knock-down during larval stages has no impact. This implies that Piwi is involved in targeting HP1a when heterochromatin is established at the late blastoderm stage and possibly also during embryogenesis, but that the silent chromatin state created is transmitted through cell division independent of the piRNA system. In contrast, heterochromatin structural protein HP1a is required for both initial heterochromatin assembly and the following mitotic inheritance. HP1a profiles in piwi mutant animals confirm that Piwi depletion leads to decreased HP1a levels in pericentric heterochromatin, particularly in TEs. The results suggest that the major role of the piRNA system in assembly of heterochromatin in non-gonadal somatic cells occurs in the early embryo during heterochromatin formation, and further demonstrate that failure of heterochromatin formation in the early embryo impacts the phenotype of the adult.