Recent investigations have implicated long antisense noncoding RNAs in the epigenetic regulation of chromosomal domains. Here we show that Kcnq1ot1 is an RNA polymerase II-encoded, 91 kb-long, moderately stable nuclear transcript and that its stability is important for bidirectional silencing of genes in the Kcnq1 domain. Kcnq1ot1 interacts with chromatin and with the H3K9- and H3K27-specific histone methyltransferases G9a and the PRC2 complex in a lineage-specific manner. This interaction correlates with the presence of extended regions of chromatin enriched with H3K9me3 and H3K27me3 in the Kcnq1 domain in placenta, whereas fetal liver lacks both chromatin interactions and heterochromatin structures. In addition, the Kcnq1 domain is more often found in contact with the nucleolar compartment in placenta than in liver. Taken together, our data describe a mechanism whereby Kcnq1ot1 establishes lineage-specific transcriptional silencing patterns through recruitment of chromatin remodeling complexes and maintenance of these patterns through subsequent cell divisions occurs via targeting the associated regions to the perinucleolar compartment.