Here, epigenetic regulation of centromeric chromatin in fission yeast (Schizosaccharomyces pombe) is reviewed, focussing on the role of histone modifications and the link to RNA interference (RNAi). Fission yeast centromeres are organized into two structurally and functionally distinct domains, both of which are required for centromere function. The central core domain anchors the kinetochore structure while the flanking heterochromatin domain is important for sister centromere cohesion. The chromatin structure of both domains is regulated epigenetically. In the central core domain, the histone H3 variant Cnp1(CENP-A) plays a key role. In the flanking heterochromatin domain, histones are kept underacetylated by the histone deacetylases (HDACs) Clr3, Clr6 and Sir2, and methylated by Clr4 methyltransferase (HMTase) to create a specific binding site for the Swi6 protein. Swi6 then directly mediates cohesin binding to the centromeric heterochromatin. Recently, a surprising link was made between heterochromatin formation and RNAi.