The formation of condensed, transcriptionally repressed heterochromatin is essential for controlling gene expression throughout development, silencing parasitic DNA elements, and for genome stability and inheritance. Cells employ diverse mechanisms for controlling heterochromatin states through proteins that modify DNA and histones. An emerging theme is that chromatin-associated RNAs play important roles in regulating heterochromatin proteins by controlling their initial recruitment to chromatin, their stable association with chromatin, their spread along chromatin, or their enzymatic activity. Major challenges for the field include not only identifying regulatory RNAs, but understanding the underlying biochemical mechanisms for how RNAs associate with chromatin, the specificity of interactions between heterochromatin proteins and RNA, and how these binding events manifest in cells to orchestrate RNA-mediated regulation of heterochromatin.