Constitutive heterochromatin is a compact, transcriptionally inert structure formed in gene-poor and repeat- and transposon-rich regions. In Arabidopsis, constitutive heterochromatin is characterized by hypermethylated DNA and histone H3 dimethylated at lysine (K) 9 (H3K9me2) together with depletion of histone H3 dimethylated at lysine 4 (H3K4me2). Here, we describe loci with intermediate properties of heterochromatin in which transcription downregulation is inherited in a manner similar to constitutive heterochromatin, although the loci are associated with opposing histone marks--H3K4me2 and H3K9me2. In the ddm1 (decrease in DNA methylation 1) mutants, their transcriptional activation is accompanied by the expected shift in the H3 modifications--depletion of H3K9me2 and enrichment in H3K4me2. In mom1 (Morpheus' molecule 1) mutants, however, a marked increase in transcription is not accompanied by detectable changes in the levels of H3K4me2 and H3K9me2. Therefore, transcriptional regulation in the intermediate heterochromatin involves two distinct epigenetic mechanisms. Interestingly, silent transgenic inserts seem to acquire properties characteristic of the intermediate heterochromatin.