Chromatin structure at Schizosaccharomyces pombe centromeres is unusua
l. The insertion of the ura4 gene within these centromeres resulted in
genetically identical cells mosaic for its expression. Placement of t
he ade6 gene within cen1 or cen3 resulted in red-white sectored coloni
es, demonstrating the instability of gene expression. The occurrence o
f pink colonies implied that intermediate levels of repression were es
tablished. Repression of both genes within centromeres was temperature
sensitive. The chromatin structure of the ura4 gene at centromeres wa
s altered, suggesting that the unusual chromatin encroaches into the g
ene and inhibits normal expression. These repressive effects at S. pom
be centromeres resemble the classical phenomenon of position effect va
riegation imposed by Drosophila heterochromatin on nearby genes. Howev
er, since the epigenetic states can be set at intermediate levels of e
xpression, a purely euchromatin-heterochromatin dichotomy does not app
ly. A model for the epigenetic regulation of genes placed within S. po
mbe centromeres is presented.