Stably maintaining specific states of gene expression during cell division is crucial for cellular differentiation. In fission yeast, such patterns result from directed gene rearrangements and chromosomally inherited epigenetic gene control mechanisms that control mating cell type. Recent advances have shown that a specific DNA strand at the mat1 locus is "differentiated" by a novel strand-specific imprint so that nonequivalent sister chromatids are produced. Therefore, cellular differentiation is a natural consequence of the fact that DNA strands are complementary and nonequivalent. Another epigenetic control that "silences" library copies of mat-information is due to heterochromatin organization. This is a clear case where Mendel's gene is composed of DNA plus the associated epigenetic moiety. Following up on initial genetic studies with more recent molecular investigations, this system has become one of the prominent models to understand mechanisms of gene regulation, genome integrity, and cellular differentiation. By applying lessons learned from these studies, such epigenetic gene control mechanisms, which must be installed in somatic cells, might explain mechanisms of cellular differentiation and development in higher eukaryotes.