Krüppel-associated box-containing zinc finger proteins (KRAB-ZFPs) repress transcription via functional interaction with the corepressor KRAB-associated protein-1 (KAP-1). KAP-1 directly interacts with heterochromatin protein 1 (HP1), a dose-dependent regulator of heterochromatin-mediated silencing. Here we show that two KRAB-ZFPs that we previously identified, KRAZ1 and KRAZ2, are targeted to foci of centromeric heterochromatin containing HP1alpha through the interaction with KAP-1. Centromeric targeting potential of KRAZ1 and KAP-1 is strictly correlated with their silencing activities; a KRAB mutant of KRAZ1 that is unable to bind KAP-1 and KAP-1 deletions unable to bind HP1 cannot localize to centromeric foci nor repress transcription. We provide evidence that this correlation is likely to be functionally relevant. First, overexpression of the VP16 transactivation domain fused with the KAP-1 deletion that binds to KRAB but not to HP1 leads to dramatic redistribution of KRAZ1 from centromeric foci and simultaneously converts KRAZ1-mediated silencing into strong transcriptional activation. Second, a specific inhibitor of histone deacetylases, trichostatin A, effectively redistributes KRAZ1 and KAP-1 from centromeric foci and partially relieves their silencing activities. These data strongly suggest that KRAB-ZFPs/KAP-1 silence transcription by dynamic recruitment of the target locus to the specific gene silencing compartment, centromeric heterochromatin, in a histone deacetylase-dependent manner.