Telomeres play important roles in safeguarding the genome. The specialized repressive chromatin that assembles at telomeres and subtelomeric domains is key to this protective role. However, in many organisms, the repetitive nature of telomeric and subtelomeric sequences has hindered research efforts. The fission yeast S. pombe has provided an important model system for dissection of chromatin biology due to the relative ease of genetic manipulation and strong conservation of important regulatory proteins with higher eukaryotes. Telomeres and the telomere-binding shelterin complex are highly conserved with mammals, as is the assembly of constitutive heterochromatin at subtelomeres. In this review, we seek to summarize recent work detailing the assembly of distinct chromatin structures within subtelomeric domains in fission yeast. These include the heterochromatic SH subtelomeric domains, the telomere-associated sequences (TAS), and ST chromatin domains that assemble highly condensed chromatin clusters called knobs. Specifically, we review new insights into the sequence of subtelomeric domains, the distinct types of chromatin that assemble on these sequences and how histone H3 K36 modifications influence these chromatin structures. We address the interplay between the subdomains of chromatin structure and how subtelomeric chromatin is influenced by both the telomere-bound shelterin complexes and by euchromatic chromatin regulators internal to the subtelomeric domain. Finally, we demonstrate that telomere clustering, which is mediated via the condensed ST chromatin knob domains, does not depend on knob assembly within these domains but on Set2, which mediates H3K36 methylation.