The phosphorylation of heterochromatin protein 1 (HP1) has been previously described in studies of mammals, but the biological implications of this modification remain largely elusive. Here, we show that the N-terminal phosphorylation of HP1α plays a central role in its targeting to chromatin. Recombinant HP1α prepared from mammalian cultured cells exhibited a stronger binding affinity for K9-methylated histone H3 (H3K9me) than that produced in Escherichia coli. Biochemical analyses revealed that HP1α was multiply phosphorylated at N-terminal serine residues (S11-14) in human and mouse cells and that this phosphorylation enhanced HP1α's affinity for H3K9me. Importantly, the N-terminal phosphorylation appeared to facilitate the initial binding of HP1α to H3K9me by mediating the interaction between HP1α and a part of the H3 tail that was distinct from the methylated K9. Unphosphorylatable mutant HP1α exhibited severe heterochromatin localization defects in vivo, and its prolonged expression led to increased chromosomal instability. Our results suggest that HP1α's N-terminal phosphorylation is essential for its proper targeting to heterochromatin and that its binding to the methylated histone tail is achieved by the cooperative action of the chromodomain and neighboring posttranslational modifications.