Our research addresses the relationship between subnuclear localization and gene expression in fission yeast. We observed the relocalization of a heterochromatic region, the mating-type region, from its natural location at the spindle-pole body to the immediate vicinity of the nucleolus. Relocalization occurred in response to a DNA rearrangement replacing a boundary element (IR-R) with a ribosomal DNA repeat (rDNA-R). Gene expression was strongly silenced in the relocalized mating-type region through mechanisms that differ from those operating in wild type. Also different from the wild-type situation, programmed recombination events failed to take place in the rDNA-R mutant. Increased silencing and perinucleolar localization depended on Reb1, a DNA-binding protein with cognate sites in the rDNA. Reb1 was recently shown to mediate long-range interchromosomal interactions in the nucleus through dimerization, providing a mechanism for the observed relocalization. Replacing the full rDNA repeat with Reb1-binding sites, and using mutants lacking the histone H3K9 methyltransferase Clr4, indicated that the relocalized region was silenced redundantly by heterochromatin and another mechanism, plausibly antisense transcription, achieving a high degree of repression in the rDNA-R strain.