A novel epigenetic mechanism that can affect minichromosome centromere function in vivo has been identified in S. pombe. This epigenetic system can result in the conversion of a nonfunctional centromere to a functional one without changes in the content, structural arrangement, or chemical modification state of the minichromosomal DNA. The conversion from a centromere-inactive to an active state, which is evident with minichromosomes carrying abbreviated centromeric DNA constructions, occurs with a relatively high frequency during mitotic cell divisions and readily provides an in vivo assay for proper centromere formation. The centromere-targeted epigenetic system supports a model for centromere function that involves specific de novo folding of centromeric components into a higher order chromatin structure.