Heterochromatin is generally associated with gene silencing, yet in Drosophila melanogaster, heterochromatin harbors hundreds of functional protein-encoding genes, some of which depend on heterochromatin for expression. Here we document a recent evolutionary transition of a gene cluster from euchromatin to heterochromatin, which occurred <20 million years ago in the drosophilid lineage. This finding reveals evolutionary fluidity between these two genomic compartments and provides a powerful approach to identifying differences between euchromatic and heterochromatic genes. Promoter mapping of orthologous gene pairs led to the discovery of the "slippery promoter," characterized by multiple transcriptional start sites predominantly at adenines, as a common promoter type found in both heterochromatic and euchromatic genes of Drosophila. Promoter type is diverse within the gene cluster but largely conserved between heterochromatic and euchromatic genes, eliminating the hypothesis that adaptation to heterochromatin required major alterations in promoter structure. Transition to heterochromatin is consistently associated with gene expansion due to the accumulation of transposable elements and increased A-T content. We conclude that heterochromatin-dependent regulation requires specialized enhancers or higher-order interactions and propose a facilitating role for transposable elements.