The assembly of higher order chromatin structures has been Linked to the co
valent modifications of histone tails. We provide in vivo evidence that lys
ine 9 of histone H3 (H3 Lys(9)) is preferentially methylated by the Clr4 pr
otein at heterochromatin-associated regions in fission yeast. Both the cons
erved chromo- and SET domains of Clr4 are required for H3 Lys(9) methylatio
n in vivo. Localization of Swi6, a homolog of Drosophila HP1, to heterochom
atic regions is dependent on H3 Lysg methylation. Moreover, an H3-specific
deacetylase Clr3 and a beta -propeller domain protein Rik1 are required for
H3 Lys(9) methylation by Clr4 and Swi6 Localization. These data define a c
onserved pathway wherein sequential histone modifications establish a "hist
one code" essential for the epigenetic inheritance of heterochromatin assem
bly.