Abstract. The epigenetic control of heterochromatin deposition is achieved through a network of protein interactions mediated by the heterochromatin protein 1 (HP1). In earlier studies, we showed that the CCAAT/ enhancer-binding protein alpha (C/EBPα), a transcription factor that controls cell differentiation, localizes to heterochromatin, and interacts with HP1α. Here, deletion and mutagenesis are combined with live-cell imaging approaches to characterize these protein interactions. The results demonstrate that the basic region and leucine zipper (BZip) domain of C/EBPα is sufficient for the interaction with HP1α in regions of heterochromatin. Fluorescence correlation spectroscopy and cross-correlation (FCS and FCCS) revealed very different diffusion profiles for HP1α and the BZip protein, and co-expression studies indicated that the mobile fractions of these nuclear proteins diffuse independently of one another. The steady-state interactions of these proteins in regions of heterochromatin were monitored using Förster resonance energy transfer (FRET). A point mutation in HP1α, W174A, which disrupts the interactions with proteins containing the common PxVxL motif did not affect the interaction with the BZip protein. In contrast, the HP1α W41A mutation, which prevents binding to methylated histones, exhibited greatly reduced FRET efficiency when compared to the wild type HP1α or HP1αW174A. The functional significance of these interactions is discussed.