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Background  Cellular quiescence is a reversible differentiation state during which cells modify their gene expression program to inhibit metabolic functions and adapt to a new cellular environment. The epigenetic changes accompanying these alterations are not well understood. We used fission yeast cells as a model to study the regulation of quiescence. When these cells are starved for nitrogen, the cell cycle is arrested in G1, and the cells enter quiescence (G0). A gene regulatory program is initiated, including downregulation of thousands of genes—for example, those related to cell proliferation—and upregulation of specific genes—for example, autophagy genes—needed to adapt to the physiological challenge. These changes in gene expression are accompanied by a marked alteration of nuclear organization and chromatin structure.    Results  Here, we investigated the role of Leo1, a subunit of the conserved RNA polymerase-associated factor 1 (Paf1) complex, in the quiescence process using fission yeast as the model organism. Heterochromatic regions became very dynamic in fission yeast in G0 during nitrogen starvation. The reduction of heterochromatin in early G0 was correlated with reduced target of rapamycin complex 2 (TORC2) signaling. We demonstrated that cells lacking Leo1 show reduced survival in G0. In these cells, heterochromatic regions, including subtelomeres, were stabilized, and the expression of many genes, including membrane transport genes, was abrogated. TOR inhibition mimics the effect of nitrogen starvation, leading to the expression of subtelomeric genes, and this effect was suppressed by genetic deletion of  leo1 .    Conclusions  We identified a protein, Leo1, necessary for survival during quiescence. Leo1 is part of a conserved protein complex, Paf1C, linked to RNA polymerase II. We showed that Leo1, acting downstream of TOR, is crucial for the dynamic reorganization of chromosomes and the regulation of gene expression during cellular quiescence. Genes encoding membrane transporters are not expressed in quiescent  leo1  mutant cells, and cells die after 2 weeks of nitrogen starvation. Taken together, our results suggest that Leo1 is essential for the dynamic regulation of heterochromatin and gene expression during cellular quiescence.    Electronic supplementary material  The online version of this article (10.1186/s13072-019-0292-7) contains supplementary material, which is available to authorized users.