In somatic cells of mammals, plants and filamentous fungi, repetitive DNA is normally silenced in the form of heterochromatin with the contaminant occurrence of methylated cytosines (5mC) and methylated histone H3 lysine 9 residues (H3K9me2/3). The basis for the selective silencing of repetitive sequences has been proposed to involve aberrant products of DNA replication and repair, sequence-specific binding proteins, and RNA-based mechanisms. The pathway of heterochromatin assembly has been elucidated in particular detail in the filamentous fungus Neurospora crassa. In this organism, DNA methylation is established by DIM-2, a classical cytosine methylase, which is recruited to chromatin by the physical association with HP1 that recognizes H3K9me3 created by DIM-5, a Su(var)3-9 lysine methylase. Here we show that DIM-2 can promote clustered cytosine-to-thymine mutations in the germline (premeiotic) cells of Neurospora. This process is specifically dependent on the presence of repetitive DNA and requires DIM-5. Our previous studies have shown that repetitive sequences are designated for mutation in the absence of Rad51, and that this process involves the pattern of homology recognition expected for direct interactions between intact, co-aligned DNA duplexes. Taken together, our findings suggest that direct interactions between intact DNA duplexes may serve as the fundamental trigger of heterochromatin assembly on repetitive sequences. A mechanism for occurrence of clustered mutations is also of interest for the etiology of cancer, where extensive chromosomal duplications and clustered mutations are prominent features.