Both position-effect variegation (PEV) in Drosophila and telomeric position-effect in yeast (TPE) result from the mosaic inactivation of genes relocated next to a block of centromeric heterochromatin or next to telomeres. In many aspects, these phenomena are analogous to other epigenetic silencing mechanisms, such as the control of homeotic gene clusters, X-chromosome inactivation and imprinting in mammals, and mating-type control in yeast. Dominant mutations that suppress or enhance PEV are thought to encode either chromatin proteins or factors that directly affect chromatin structure. We have identified an insertional mutation in Drosophila that enhances PEV and reduces transcription of the gene in the eye-antenna imaginal disc. The gene corresponds to that encoding the transcriptional regulator RPD3 in yeast, and to a human histone deacetylase. In yeast, RRD3-deletion strains show enhanced TPE, suggesting a conserved role of the histone deacetylase RPD3 in counteracting genomic silencing. This function of RPD3, which is in contrast to the general correlation between histone acetylation and increased transcription, might be due to a specialized chromatin structure at silenced loci.