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Despite the long-observed correlation between H3K9me3, chromatin architecture, and transcriptional repression, how H3K9me3 regulates genome higher-order organization and transcriptional activity in living cells remains unclear.    Result  Here, we develop EpiGo (Epigenetic perturbation induced Genome organization)-KRAB to introduce H3K9me3 at hundreds of loci spanning megabases on human chromosome 19 and simultaneously track genome organization. EpiGo-KRAB is sufficient to induce genomic clustering and de novo heterochromatin-like domain formation, which requires SETDB1, a methyltransferase of H3K9me3. Unexpectedly, EpiGo-KRAB-induced heterochromatin-like domain does not result in widespread gene repression except a small set of genes with concurrent loss of H3K4me3 and H3K27ac. Ectopic H3K9me3 appears to spread in inactive regions but is largely restricted from transcriptional initiation sites in active regions. Finally, Hi-C analysis showed that EpiGo-KRAB reshapes existing compartments mainly at compartment boundaries.    Conclusions  These results reveal the role of H3K9me3 in genome organization could be partially separated from its function in gene repression.    Supplementary information   Supplementary information  accompanies this paper at 10.1186/s13059-020-02201-1.

Simultaneous epigenetic perturbation and genome imaging reveal distinct roles of H3K9me3 in chromatin architecture and transcription