Heterochromatin protein 1 (HP1) was first described in Drosophila melanogaster as a heterochromatin associated protein with dose-dependent effect on gene silencing. The HP1 family is evolutionarily highly conserved and there are multiple members within the same species. The multi-functionality of HP1 reflects its ability to interact with diverse nuclear proteins, ranging from histones and transcriptional co-repressors to cohesion and DNA replication factors. As its name suggests, HP1 is well-known as a silencing protein found at pericentromeres and telomeres. In contrast to previous views that heterochromatin is transcriptionally inactive; noncoding RNAs transcribed from heterochromatic DNA repeats regulates the assembly and function of heterochromatin ranging from fission yeast to animals. Moreover, more recent progress has shed light on the paradoxical properties of HP1 in the nucleus and has revealed, unexpectedly, its existence in the euchromatin. Therefore, HP1 proteins might participate in both transcription repression in heterochromatin and euchromatin.