Heterochromatin in the eukaryotic genome is rigorously controlled by the concerted action of protein factors and RNAs. Here, we investigate the RNA binding function of ATRX, a chromatin remodeler with roles in silencing of repetitive regions of the genome and in recruitment of the polycomb repressive complex 2 (PRC2). We identify ATRX RNA binding regions (RBRs) and discover that the major ATRX RBR lies within the N-terminal region of the protein, distinct from its PHD and helicase domains. Deletion of this ATRX RBR (ATRXΔRBR) compromises ATRX interactions with RNAs in vitro and in vivo and alters its chromatin binding properties. Genome-wide studies reveal that loss of RNA interactions results in a redistribution of ATRX on chromatin. Finally, our studies identify a role for ATRX-RNA interactions in regulating PRC2 localization to a subset of polycomb target genes.