In development, cell identity is maintained by epigenetic functions that prevent changes in cell type-specific transcription programs. Recent insights into gene silencing mechanisms by Polycomb group (PcG) and trithorax group (trxG) proteins reveal that the memory system involves a concerted process of chromatin modification, blocking of RNA polymerase II, and synthesis of noncoding RNA. Remarkably, cell memory is regulated by a balance between repressors and activators that maintains both transcription status and at the same time the possibility of switching to a different state.