The conserved serine/threonine protein kinase target of rapamycin (TOR) is a major regulator of eukaryotic cellular and organismal growth and a valuable target for drug therapy. TOR forms the core of two evolutionary conserved complexes, TOR complex 1 (TORC1) and TORC2. In the fission yeast  Schizosaccharomyces pombe , TORC2 responds to glucose levels and, by activating the protein kinase Gad8 (an orthologue of human AKT), is required for well-regulated cell cycle progression, starvation responses, and cell survival. Here, we report that TORC2-Gad8 is also required for gene silencing and the formation of heterochromatin at the  S. pombe  mating-type locus and at subtelomeric regions. Deletion of TORC2-Gad8 resulted in loss of the heterochromatic modification of histone 3 lysine 9 dimethylation (H3K9me2) and an increase in euchromatic modifications, including histone 3 lysine 4 trimethylation (H3K4me3) and histone 4 lysine 16 acetylation (H4K16Ac). Accumulation of RNA polymerase II (Pol II) at subtelomeric genes in TORC2-Gad8 mutant cells indicated a defect in silencing at the transcriptional level. Moreover, a concurrent decrease in histone 4 lysine 20 dimethylation (H4K20me2) suggested elevated histone turnover. Loss of gene silencing in cells lacking TORC2-Gad8 is partially suppressed by loss of the anti-silencer Epe1 and fully suppressed by loss of the Pol II-associated Paf1 complex, two chromatin regulators that have been implicated in heterochromatin stability and spreading. Taken together, our findings suggest that TORC2-Gad8 signaling contributes to epigenetic stability at subtelomeric regions and the mating-type locus in  S. pombe .