Transcriptional competence defines the heterochromatin nucleating potential of isolated MSR units.

In mouse cells, constitutive heterochromatin is associated with underlying arrays of A/T-rich DNA repeat elements, called the major satellite repeats (MaSat or MSR). We examine >18,000 MSR copies in mouse ES cells and identify that heterochromatin forms only at transcriptionally competent MSR units. To directly dissect the function of MSR DNA, we insert isolated MSR units into an inert genomic region that is repeat- and gene-free. Insertion of three or more intact MSR units induces heterochromatic histone marks, recruitment of HP1 and incorporation of histone H1. Only transcriptionally competent MSR units, but not permutated MSR variants or LINE1 5'UTR elements, nucleate de novo heterochromatin. MSR-derived transcription is bi-directional and MSR-originating transcripts are attenuated by the RNAPII-associated Integrator complex. Instructively, multi-copy intact MSR units impart an unwound DNA template that facilitates RNAPII engagement. Together, this study uncovers a DNA/RNA-based logic and transcription-coupled mechanism for the nucleation of heterochromatin.