Repression of endogenous retroviral elements (ERVs) is facilitated by KAP1 (KRAB-associated protein 1)-containing complexes, however the underlying mechanism remains unclear. Here, we show that binding of KAP1 to the major component of the heterochromatin spreading and maintenance network, HP1α, plays a critical role in silencing of repetitive elements. Structural, biochemical and mutagenesis studies demonstrate that the association of the HP1 box of KAP1 (KAP1Hbox) with the chromoshadow domain of HP1α (HP1αCSD) leads to a symmetrical arrangement of HP1αCSD and multimerization that may promote the closed state of chromatin. The formation of the KAP1Hbox-HP1αCSD complex enhances charge driven DNA binding and phase separation activities of HP1α. ChIP-seq and ATAC-seq analyses using KAP1 knock out mouse embryonic stem cells expressing wild type KAP1 or HP1-deficient KAP1 mutant show that in vivo, KAP1 engagement with HP1 is required for maintaining inaccessible chromatin at ERVs. Our findings provide mechanistic and functional insights that further our understanding of how ERVs are silenced.