Studies of PEV are providing important insights into the mechanisms that influence chromatin structure beyond the level of the nucleosome. A surprisingly large network of proteins influences PEV and heterochromatin formation in Drosophila. Recent molecular studies have provided a better understanding of the potential roles of these proteins. However, more extensive analyses of the physical interactions among these proteins, their DNA- and chromosome-binding properties, and their roles in gene expression are required to build more precise molecular models that accommodate the known biological functions of heterochromatin and explain the multiple genetic and epigenetic mechanisms of PEV.