The degree of chromatin compaction plays a fundamental role in controlling the accessibility of DNA to the transcription machinery as well as other DNA-dependent biological pathways. The mammalian HP1 (Heterochromatin protein 1) protein family consists of three members: HP1α, β and γ. Each paralogue regulates formation and maintenance of heterochromatin by binding to the repressive chromatin marks H3K9me2/3 with their chromodomains (CDs). Despite high sequence conservation, each HP1 paralogue possesses specific functions, which are likely to be cell type specific. The aim of my thesis was to find novel functions for HP1γ in mouse embryonic stem cells (mESCs) and breast cancer cells. Mass spectrometry analysis identified citrullination of residues R38 and R39 within the CD of HP1γ. I show that these residues are citrullinated by peptidyl arginine deiminase 4 (PADI4) in vitro and in vivo. Mutations in HP1γ (R38/9A), designed to mimic the loss of charge accompanied with citrullination, affect HP1γ’s binding to H3K9me3 peptides and reduce its residence time on chromatin in differentiated mESCs, indicating a role for citrullination in regulating HP1γ binding to chromatin during differentiation. Furthermore, I studied the phenotype of HP1γ depletion in two human breast cancer models and found that HP1γ is essential for cell proliferation and viability of cancer, but not of normal epithelial cells. I performed whole transcriptome analysis in breast cancer cells depleted of HP1γ and cross-referenced it with its genomic localisation, which identified increased expression of interferon/antiviral defense genes and activation of pro-apoptotic pathways. Whilst genes involved in these pathways were not directly bound by HP1γ, this analysis also identified HP1γ as a novel regulator of zinc finger (ZNF) genes. In summary, I identified novel post-translational modifications in HP1γ and characterised them in mESCs. I further demonstrated a role for HP1γ regulating breast cancer cell viability and identified HP1γ as a novel regulator of ZNF genes. My findings highlight HP1γ as a potential target for breast cancer therapy.