Non-coding DNA has consistently increased during evolution of higher eukaryotes. Since the number of genes has remained relatively static during the evolution of complex organisms, it is believed that increased degree of sophisticated regulation of genes has contributed to the increased complexity. A higher proportion of non-coding DNA, including repeats, is likely to provide more complex regulatory potential. Here, we propose that repeats play a regulatory role by contributing to the packaging of the genome during cellular differentiation. Repeats, and in particular the simple sequence repeats, are proposed to serve as landmarks that can target regulatory mechanisms to a large number of genomic sites with the help of very few factors and regulate the linked loci in a coordinated manner. Repeats may, therefore, function as common target sites for regulatory mechanisms involved in the packaging and dynamic compartmentalization of the chromatin into active and inactive regions during cellular differentiation.