Posttranslational modifications of histones play an essential role in heterochromatin assembly. Whereas the role of Clr4/Suv39h-mediated methylation of histone H3 at lysine 9 (H3K9) in heterochromatin assembly is well studied, the exact function of histone deacetylases (HDACs) in this process is unclear. We show that Clr3, a fission yeast homolog of mammalian class II HDACs, acts in a distinct pathway parallel to RNAi-directed heterochromatin nucleation to recruit Clr4 and mediate H3K9 methylation at the silent mating-type region and centromeres. At the mat locus, Clr3 is recruited at a specific site through a mechanism involving ATF/CREB family proteins. Once recruited, Clr3 spreads across the 20 kb silenced domain that requires its own HDAC activity and heterochromatin proteins including Swi6/HP1. We also demonstrate that Clr3 contributes to heterochromatin maintenance by stabilizing H3K9 trimethylation and by preventing histone modifications associated with active transcription, and that it limits RNA polymerase II accessibility to naturally silenced repeats at heterochromatin domains.