The mechanism for transcriptional silencing of pericentric heterochromatin is conserved from fission yeast to mammals. Silenced genome regions are marked by epigenetic methylation of histone H3, which serves as a binding site for structural heterochromatin proteins. In the fission yeast Schizosaccharomyces pombe, the major structural heterochromatin protein is Swi6. To gain insight into Swi6 function in vivo, we have studied its dynamics in the nucleus of living yeast. We demonstrate that, in contrast to mammalian cells, yeast heterochromatin domains undergo rapid, large-scale motions within the nucleus. Similar to the situation in mammalian cells, Swi6 does not permanently associate with these chromatin domains but binds only transiently to euchromatin and heterochromatin. Swi6 binding dynamics are dependent on growth status and on the silencing factors Clr4 and Rik1, but not Clr1, Clr2, or Clr3. By comparing the kinetics of mutant Swi6 proteins in swi6(-) and swi6(+) strains, we demonstrate that homotypic protein-protein interactions via the chromoshadow domain stabilize Swi6 binding to chromatin in vivo. Kinetic modeling allowed quantitative estimation of residence times and indicated the existence of at least two kinetically distinct populations of Swi6 in heterochromatin. The observed dynamics of Swi6 binding are consistent with a stochastic model of heterochromatin and indicate evolutionary conservation of heterochromatin protein binding properties from mammals to yeast.