The phosphorylation of heterochromatin protein 1 (HP1) has been previously described in studies of mammals, but the biological implications of this modification remain largely elusive. Here, we show that the N-terminal phosphorylation of HP1␣ plays a central role in its targeting to chromatin. Recombinant HP1␣ prepared from mammalian cultured cells exhibited a stronger binding affinity for K9-methylated histone H3 (H3K9me) than that produced in Escherichia coli. Biochemical analyses revealed that HP1␣ was multiply phosphorylated at N-terminal serine residues (S11-14) in human and mouse cells and that this phosphorylation enhanced HP1␣'s affinity for H3K9me. Importantly, the N-terminal phosphorylation appeared to facilitate the initial binding of HP1␣ to H3K9me by mediating the interaction between HP1␣ and a part of the H3 tail that was distinct from the methylated K9. Unphosphorylatable mutant HP1␣ exhibited severe heterochromatin localization defects in vivo, and its prolonged expression led to increased chromosomal instability. Our results suggest that HP1␣'s N-terminal phosphorylation is essential for its proper targeting to heterochromatin and that its binding to the methylated histone tail is achieved by the cooperative action of the chromodomain and neighboring posttranslational modifications.The formation of the higher-order chromatin structure, the so-called heterochromatin, is critical for genomic stability and transcriptional silencing (19,21,30). Heterochromatin protein 1 (HP1) is a nonhistone chromosomal protein that was initially discovered in Drosophila melanogaster as a factor that is enriched at highly condensed, transcriptionally inert regions of polytene chromosomes (24,25). HP1 is an evolutionarily conserved molecule whose homologues and isoforms have been previously identified in a wide range of eukaryotic organisms (9). As well as being an architectural component of heterochromatin, HP1 is known to play crucial roles in heterochromatin-mediated gene silencing. Profound effects of HP1 deletion, mutation, or overexpression on transcriptional silencing have been previously demonstrated in Drosophila (11, 12), Schizosaccharomyces pombe (13), and mammals (17). Moreover, an ever-expanding list of HP1-interacting proteins indicates that HP1 may also be involved in the regulation of several biological processes, including transcriptional activation, faithful chromosome segregation, and DNA damage repair (8,19,21,30).Structurally, all HP1 homologues possess two functionally distinct globular domains, the N-terminal chromodomain (CD) (39) and the C-terminal chromoshadow domain (CSD) (1), which are linked by an unstructured hinge region. The CD recognizes and interacts with methylated lysine 9 of the histone H3 N-terminal tail, which is a characteristic modification in heterochromatic regions (4,27,35). The CSD, on the other hand, is responsible for dimer formation and is involved in HP1's interactions with a large variety of proteins (5,44,46). Because of its abilities to bind directly to chromatin an...