The eukaryotic genome is highly organized in the nucleus, and this organization affects various nuclear processes. However, the molecular details of higher-order organization of chromatin remain obscure. In the present study, we show that the Saccharomyces cerevisiae silenced loci HML and HMR cluster in three-dimensional space throughout the cell cycle and independently of the telomeres. Long-range HML-HMR interactions require the homologous recombination (HR) repair pathway and phosphorylated H2A (γ-H2A). γ-H2A is constitutively present at silenced loci in unperturbed cells, its localization requires heterochromatin, and it is restricted to the silenced domain by the transfer DNA boundary element. SMC proteins and Scc2 localize to the silenced domain, and Scc2 binding requires the presence of γ-H2A. These findings illustrate a novel pathway for heterochromatin organization and suggest a role for HR repair proteins in genomic organization.