HP1 is a structural component of heterochromatin. Mammalian HP1 isoforms HP1α, HP1β, and HP1γ play different roles in genome stability, but their precise role in heterochromatin structure is unclear. Analysis of Hp1α-/-, Hp1β-/-, and Hp1γ-/- MEFs show that HP1 proteins have both redundant and unique functions within pericentric heterochromatin (PCH) and also act globally throughout the genome. HP1α confines H4K20me3 and H3K27me3 to regions within PCH, while its absence results in a global hyper-compaction of chromatin associated with a specific pattern of mitotic defects. In contrast, HP1β is functionally associated with Suv4-20h2 and H4K20me3, and its loss induces global chromatin decompaction and an abnormal enrichment of CTCF in PCH and other genomic regions. Our work provides insight into the roles of HP1 proteins in heterochromatin structure and genome stability.