Chromatin modification by Polycomb proteins provides an essential strategy for gene silencing in higher eukaryotes. Polycomb repressive complexes (PRCs) silence key developmental regulators and are centrally integrated in the transcriptional circuitry of stem cells. PRC2 trimethylates histone H3 on lysine 27 (H3K27me3), and PRC1-type complexes ubiquitylate histone H2A and compact polynucleosomes. How PRCs are deployed to select and silence genomic targets is the subject of intense investigation. We review advances on targeting, modulation, and functions of PRC1 and PRC2 and progress on defining the transcriptional steps they impact. Recent findings emphasize PRC1 targeting independent of H3K27me3, nonenzymatic PRC1-mediated compaction, and connections between PRCs and noncoding RNAs. Systematic analyses of Polycomb complexes and associated histone modifications during DNA replication and mitosis have also emerged. The stage is now set to reveal fundamental epigenetic mechanisms that determine how Polycomb target genes are silenced and how Polycomb silence is preserved through cell-cycle progression.