The interface between cellular systems involving small noncoding RNAs and 
epigenetic change remains largely unexplored in metazoans. RNA-induced silencing 
systems have the potential to target particular regions of the genome for 
epigenetic change by locating specific sequences and recruiting chromatin 
modifiers. Noting that several genes encoding RNA silencing components have been 
implicated in epigenetic regulation in Drosophila, we sought a direct link 
between the RNA silencing system and heterochromatin components. Here we show 
that PIWI, an ARGONAUTE/PIWI protein family member that binds to 
Piwi-interacting RNAs (piRNAs), strongly and specifically interacts with 
heterochromatin protein 1a (HP1a), a central player in heterochromatic gene 
silencing. The HP1a dimer binds a PxVxL-type motif in the N-terminal domain of 
PIWI. This motif is required in fruit flies for normal silencing of transgenes 
embedded in heterochromatin. We also demonstrate that PIWI, like HP1a, is itself 
a chromatin-associated protein whose distribution in polytene chromosomes 
overlaps with HP1a and appears to be RNA dependent. These findings implicate a 
direct interaction between the PIWI-mediated small RNA mechanism and 
heterochromatin-forming pathways in determining the epigenetic state of the fly 
genome.