Telomeric regions in Drosophila are composed of three subdomains. A chromosome cap distinguishes the chromosome end from a DNA double-strand break; an array of retrotransposons, HeT-A, TART, and TAHRE (HTT), maintains telomere length by targeted transposition to chromosome ends; and telomere-associated sequence (TAS), which consists of a mosaic of complex repeated sequences, has been identified as a source of gene silencing. Heterochromatin protein 1 (HP1) and HP1-ORC-associated protein (HOAP) are major protein components of the telomere cap in Drosophila and are required for telomere stability. Besides the chromosome cap, HP1 is also localized along the HTT array and in TAS. Mutants for Su(var)205, the gene encoding HP1, have decreased the HP1 level in the HTT array and increased transcription of individual HeT-A elements. This suggests that HP1 levels directly affect HeT-A activity along the HTT array, although they have little or no effect on transcription of a white reporter gene in the HTT. Chromatin immunoprecipitation to identify other heterochromatic proteins indicates that TAS and the HTT array may be distinct from either heterochromatin or euchromatin.