ABSTRACT Heterochromatin protein 1 (HP1) was initially discovered as a protein that is associated with the heterochromatin at the chromocenter of polytene chromosomes in Drosophila larval salivary glands. In this paper we investigate the localization of heterochromatin protein 1 in the diploid nuclei of Drosophila embryos. We focus on its association with the interphase heterochromatin in fixed embryos before and during cycle 14, the developmental time at which heterochromatin becomes most conspicuous, and also follow its localization during mitosis. The GAGA transcription factor was recently shown to be localized at sequences within α-heterochromatin in pre-cycle 14 embryos, and an antibody against this protein serves as a convenient marker for these sequences. We find an enrichment of heterochromatin protein 1 in the intensely DAPI-staining regions near the apical surface of nuclear cycle 10 embryos. At this stage GAGA factor is localized into punctate structures in this same region. This enrichment for HP1 is markedly increased during nuclear cycle 14. Surprisingly, whereas GAGA factor retains its association with the heterochromatin throughout the cell cycle, a significant fraction of HP1 is dispersed throughout the spindle around the segregating chromosomes during mitosis. This dispersed pool of heterochromatin protein 1 was observed during mitosis in both early and late Drosophila embryos and in an analysis of a bacterially produced 6× histidine-heterochromatin protein 1 fusion protein injected into living Drosophila embryos. When Drosophila tissue culture cells were prepared by a method which removes soluble protein and avoids fixation of the mitotic chromosomes, an enrichment for heterochromatin protein 1 in the heterochromatin of the chromosomes was discovered also.