Pericentric heterochromatin transcription has been implicated in Schizosaccharomyces pombe heterochromatin assembly and maintenance. However, in mammalian systems, evidence for such transcription is inconsistent. We identify two populations of RNA polymerase II-dependent mouse gamma satellite repeat sequence-derived transcripts from pericentric heterochromatin that accumulate at different times during the cell cycle. A small RNA species was synthesized exclusively during mitosis and rapidly eliminated during mitotic exit. A more abundant population of large, heterogeneous transcripts was induced late in G1 phase and their synthesis decreased during mid S phase, which is coincident with pericentric heterochromatin replication. In cells that lack the Suv39h1,2 methyltransferases responsible for H3K9 trimethylation, transcription occurs from more sites but is still cell cycle regulated. Transcription is not detected in quiescent cells and induction during G1 phase is sensitive to serum deprivation or the cyclin-dependent kinase inhibitor roscovatine. We demonstrate that mammalian pericentric heterochromatin transcription is linked to cellular proliferation. Our data also provide an explanation for inconsistencies in the detection of such transcripts in different systems.