Proteins that possess a chromo domain are well-known for their roles in heterochromatin assembly and maintenance. The Heterochromatin Protein 1 (HP1) family, with a chromo domain and carboxy-terminal chromo shadow domain, targets heterochromatin through interaction with histone H3 methylated on lysine 9 (H3K9me2/3). The structural and functional diversity of these proteins observed in both fission yeast and metazoans correlate with chromatin specialization. To expand these studies, we examined chromo domain proteins in the ciliate Tetrahymena thermophila, which has functionally diverse and developmentally regulated heterochromatin domains. We identified thirteen proteins similar to HP1. Together they possess only a fraction of the possible chromo domain subtypes and most lack a recognizable chromo shadow domain. Using fluorescence microscopy to track chromatin localization of tagged proteins through the life cycle, we show evidence that in T. thermophila this family has diversified with biological roles in RNAi-directed DNA elimination, germline genome structure, and somatic heterochromatin. Those proteins with H3K27me3 binding sequence characteristics localize to chromatin in mature nuclei, whereas those with H3K9me2/3 binding characteristics localize to developing nuclei undergoing DNA elimination. Findings point to an expanded and diversified family of chromo domain proteins that parallels heterochromatin diversity in ciliates.