Heterochromatin protein 1 (HP1) is a conserved nonhistone chromosomal protein, which is involved in heterochromatin formation and gene silencing in many organisms. In addition, it has been shown that HP1 is also involved in telomere capping in Drosophila. Here, we show a novel striking feature of this protein demonstrating its involvement in the activation of several euchromatic genes in Drosophila. By immunostaining experiments using an HP1 antibody, we found that HP1 is associated with developmental and heat shock–induced puffs on polytene chromosomes. Because the puffs are the cytological phenotype of intense gene activity, we did a detailed analysis of the heat shock–induced expression of the HSP70 encoding gene in larvae with different doses of HP1 and found that HP1 is positively involved in Hsp70 gene activity. These data significantly broaden the current views of the roles of HP1 in vivo by demonstrating that this protein has multifunctional roles.