Silent chromatin in budding yeast is characterized by the presence of a specialized chromatin modification complex consisting of silent information regulator (Sir) proteins, closely packed pairs of nucleosomes, and hypoacetylated and hypomethylated histones. How this specialized chromatin is established, maintained and inherited has been extensively studied. Less investigated are the determinants that constrain its linear spread along the chromatin fibre and the manner by which it represses gene transcription. Here we review the essential features of SIR-mediated heterochromatin, and discuss genomic and proteomic approaches for discerning the composition of its boundaries and for elucidating the mechanisms by which it silences transcription. Lu Gao is an orthopaedic surgeon. He is also a predoctoral student of Biochemistry and Molecular Biology, and is studying mechanisms of epigenetic gene silencing for his PhD degree. David S. Gross is a professor at the Louisiana State University Health Sciences Center. He is interested in mechanisms by which chromatin regulates gene expression. Current projects in his lab are focused on transcriptional silencing, heat shock gene regulation and p53 transcriptional regulatory mechanisms.