BACKGROUND Human centromere regions are characterized by the presence of alpha-satellite DNA, replication late in S phase and a heterochromatic appearance. Recent models propose that the centromere is organized into conserved chromatin domains in which chromatin containing CenH3 (centromere-specific H3 variant) at the functional centromere (kinetochore) forms within regions of heterochromatin. To address these models, we assayed formation of heterochromatin and euchromatin on de novo human artificial chromosomes containing alpha-satellite DNA. We also examined the relationship between chromatin composition and replication timing of artificial chromosomes. RESULTS Heterochromatin factors (histone H3 lysine 9 methylation and HP1alpha) were enriched on artificial chromosomes estimated to be larger than 3 Mb in size but depleted on those smaller than 3 Mb. All artificial chromosomes assembled markers of euchromatin (histone H3 lysine 4 methylation), which may partly reflect marker-gene expression. Replication timing studies revealed that the replication timing of artificial chromosomes was heterogeneous. Heterochromatin-depleted artificial chromosomes replicated in early S phase whereas heterochromatin-enriched artificial chromosomes replicated in mid to late S phase. CONCLUSIONS Centromere regions on human artificial chromosomes and host chromosomes have similar amounts of CenH3 but exhibit highly varying degrees of heterochromatin, suggesting that only a small amount of heterochromatin may be required for centromere function. The formation of euchromatin on all artificial chromosomes demonstrates that they can provide a chromosome context suitable for gene expression. The earlier replication of the heterochromatin-depleted artificial chromosomes suggests that replication late in S phase is not a requirement for centromere function.