Heterochromatin contains many repetitive DNA elements and few protein-encoding genes, yet it is essential for chromosome organization and inheritance. Here, we show that Drosophila that lack the Su(var)3-9 H3K9 methyltransferase display significantly elevated frequencies of spontaneous DNA damage in heterochromatin, in both somatic and germ-line cells. Accumulated DNA damage in these mutants correlates with chromosomal defects, such as translocations and loss of heterozygosity. DNA repair and mitotic checkpoints are also activated in mutant animals and are required for their viability. Similar effects of lower magnitude were observed in animals that lack the RNA interference pathway component Dcr2. These results suggest that the H3K9 methylation and RNAi pathways ensure heterochromatin stability.