The yeast retrotransposon Ty5 integrates preferentially into heterochromatin at the telomeres and HM loci. Target specificity is mediated by a six amino acid sequence motif (the targeting domain, TD) of integrase that interacts with Sir4p, a structural component of heterochromatin. When tethered to CEN plasmids as part of a Gal4p DNA binding domain (GBD) fusion protein, TD destabilizes plasmid segregation in a manner similar to that observed for CEN + HM or CEN +TEL antagonism. This instability is caused by the ability of TD to nucleate components of heterochromatin on the CEN plasmid, because CEN +TD antagonism is abrogated by sir2, sir3 and sir4 mutations and by TD mutations that prevent interaction with Sir4p. In strains that acquire resistance to CEN +TD antagonism, the CEN plasmid has either recombined with a 2 μ plasmid or sustained deletions in sequences required to bind GBD-TD. CEN +TD and CEN + HM antagonism is exacerbated by mutations in components of the Ku-mediated non-homologous end-joining pathway. These observations suggest that CEN antagonism is caused by DNA breaks that result from competition between CEN - and Sir-specific segregation pathways.