H3K9 methylation (H3K9me) specifies the establishment and maintenance of transcriptionally silent epigenetic states or heterochromatin. The enzymatic erasure of histone modifications is widely assumed to be the primary mechanism that reverses epigenetic silencing. Here, we reveal an inversion of this paradigm where a putative histone demethylase Epe1 in fission yeast, has a non-enzymatic function that opposes heterochromatin assembly. Mutations within the putative catalytic JmjC domain of Epe1 disrupt its interaction with Swi6 HP1  suggesting that this domain might have other functions besides enzymatic activity. The C-terminus of Epe1 directly interacts with Swi6 HP1 , and H3K9 methylation stimulates this protein-protein interaction in vitro and in vivo. Expressing the Epe1 C-terminus is sufficient to disrupt heterochromatin by outcompeting the histone deacetylase, Clr3 from sites of heterochromatin formation. Our results underscore how histone modifying proteins that resemble enzymes have non-catalytic functions that regulate the assembly of epigenetic complexes in cells.