Eukaryotic centromeres and telomeres are specialized chromosomal regions that share one common characteristic: their underlying DNA sequences are assembled into heritably repressed chromatin. Silent chromatin in budding and fission yeast is composed of fundamentally divergent proteins tat assemble very different chromatin structures. However, the ultimate behaviour of silent chromatin and the pathways that assemble it seem strikingly similar among Saccharomyces cerevisiae (S. cerevisiae), Schizosaccharomyces pombe (S. pombe) and other eukaryotes. Thus, studies in both yeasts have been instrumental in dissecting the mechanisms that establish and maintain silent chromatin in eukaryotes, contributing substantially to our understanding of epigenetic processes. In this review, we discuss current models for the generation of heterochromatic domains at centromeres and telomeres in the two yeast species.