The heterochromatin domain at the mat locus of Schizosaccharomyces pombe is bounded by the IR-L and IR-R barriers. A genetic screen for mutations that promote silencing beyond IR-L revealed a novel gene named epe1, encoding a conserved nuclear protein with a jmjC domain. Disruption of epe1 promotes continuous spreading of heterochromatin-associated histone modifications and Swi6 binding to chromatin across heterochromatic barriers. It also enhances position effect variegation at heterochromatic domains, suppresses mutations in silencing genes, and stabilizes the repressed epigenetic state at the mat locus. However, it does not enhance silencing establishment. Our analysis suggests that the jmjC domain is essential for Epe1 activity and that Epe1 counteracts transcriptional silencing by negatively affecting heterochromatin stability. Consistent with this proposition, the meiotic stability of established heterochromatin beyond IR-L is diminished by Epe1 activity, and overexpression of Epe1 disrupts heterochromatin through acetylation of H3-K9 and H3-K14 and methylation of H3-K4. Furthermore, overexpression of Epe1 elevates the rate of chromosome loss. We propose that Epe1 helps control chromatin organization by down-regulating the stability of epigenetic marks that govern heterochromatization.