We have isolated the complete coding sequences for two Xenopus laevis isoforms of heterochromatin protein 1, corresponding to HP1alpha and HP1gamma. The sequence of xHP1alpha shows considerable divergence from its mammalian homologues, whereas xHP1gamma is highly conserved. Functionally, xHP1alpha behaves identically to human HP1alpha. We observe unexpected differences between the two HP1 variants in binding native soluble chromatin, which seem to correlate with their distinct nuclear distributions in vivo. A surprising finding is that the characteristic interaction of HP1 chromodomains with histone H3 at methylated lysine 9 is not detected in preformed chromatin due to its inaccessibility. Instead, we localize a strong chromatin-binding activity to the short hinge region between the chromodomain and the chromoshadow domain of xHP1alpha but not xHP1gamma. This novel chromatin-binding activity has a non-specific DNA-binding component in addition to a linker histone-dependent preference for an altered chromatin structure with a likely heterochromatin organization.