The functional consequences of long-range nuclear reorganization were studied in a cell-by-cell analysis of gene expression and long-range chromosomal interactions in the Drosophila eye and eye imaginal disk. Position-effect variegation was used to stochastically perturb gene expression and probe nuclear reorganization. Variegating genes on rearrangements of Chromosomes X, 2, and 3 were probed for long-range interactions with heterochromatin. Studies were conducted only in tissues known to express the variegating genes. Nuclear structure was revealed by fluorescence in situ hybridization with probes to the variegating gene and heterochromatin. Gene expression was determined alternately by immunofluorescence against specific proteins and by eye pigment autofluorescence. This allowed cell-by-cell comparisons of nuclear architecture between cells in which the variegating gene was either expressed or silenced. Very strong correlations between heterochromatic association and silencing were found. Expressing cells showed a broad distribution of distances between variegating genes and their own centromeric heterochromatin, while silenced cells showed a very tight distribution centered around very short distances, consistent with interaction between the silenced genes and heterochromatin. Spatial and temporal analysis of interactions with heterochromatin indicated that variegating genes primarily associate with heterochromatin in cells that have exited the cell cycle. Differentiation was not a requirement for association, and no differences in association were observed between cell types. Thus, long-range interactions between distal chromosome regions and their own heterochromatin have functional consequences for the organism.