Centromeres are cis-acting chromosomal domains that direct kinetochore formation, enabling faithful chromosome segregation. Centromeric regions of higher eukaryotes are structurally complex, consisting of various epigenetically modified chromatin types including specialized chromatin at the kinetochore itself, pericentromeric heterochromatin, and flanking euchromatin. Although the features necessary for the establishment and maintenance of discrete chromatin domains remain poorly understood, two models have been proposed based either on the passive convergence of competing activities involved in individual domain formation or, alternatively, on the action of specific genomic sequences and associated proteins to actively block the propagation of one chromatin type into another. Functional analysis of centromeric sequences located at the intersection of Schizosaccharomyces pombe central core chromatin and outer repeat heterochromatin identified a chromatin barrier that contains a transfer RNA (tRNA) gene. Deletion or modification of the barrier sequences result in the propagation of pericentromeric heterochromatin beyond its normal boundary. The tRNA gene is transcriptionally active, and barrier activity requires sequences necessary for RNA polymerase III transcription. Moreover, absence of the barrier results in abnormal meiotic chromosome segregation. The identification of DNA sequences with chromatin barrier activity at the fission yeast centromere provides a model for establishment of centromeric chromatin domains in higher eukaryotes.