Distinct regions of the eukaryotic genome are packaged into different types of chromatin, with euchromatin representing gene rich, transcriptionally active regions and heterochromatin more condensed and gene poor. The assembly and maintenance of heterochromatin is important for many aspects of genome control, including silencing of gene transcription, suppression of recombination, and to ensure proper chromosome segregation. The precise mechanisms underlying heterochromatin establishment and maintenance are still unclear, but much progress has been made towards understanding this process during the last few years, particularly from studies performed in fission yeast. In this review, we hope to provide a conceptual model of centromeric heterochromatin in fission yeast that integrates our current understanding of the competing forces of transcription, replication, and RNA decay that influence its assembly and propagation.