Su(var)3-9 is a dominant modifier of heterochromatin-induced gene silencing. Like its mammalian and Schizosaccharomyces pombe homologues, Su(var) 3-9 encodes a histone methyltransferase (HMTase), which selectively methylates histone H3 at lysine 9 (H3-K9). In Su(var)3-9 null mutants, H3-K9 methylation at chromocentre heterochromatin is strongly reduced, indicating that SU(VAR)3-9 is the major heterochromatin-specific HMTase in Drosophila. SU (VAR)3-9 interacts with the heterochromatin-associated HP1 protein and with another silencing factor, SU(VAR)3-7. Notably, SU(VAR)3-9-HP1 interaction is interdependent and governs distinct localization patterns of both proteins. In Su(var)3-9 null mutants, concentration of HP1 at the chromocentre is nearly lost without affecting HP1 accumulation at the fourth chromosome. By contrast, in HP1 null mutants SU(VAR)3-9 is no longer restricted at heterochromatin but broadly dispersed across the chromosomes. Despite this interdependence, Su(var)3-9 dominates the PEV modifier effects of HP1 and Su(var)3-7 and is also epistatic to the Y chromosome effect on PEV. Finally, the human SUV39H1 gene is able to partially rescue Su(var)3-9 silencing defects. Together, these data indicate a central role for the SU(VAR)3-9 HMTase in heterochromatin-induced gene silencing in Drosophila.