Polycomb group proteins preserve body patterning through development by maintaining transcriptional silencing of homeotic genes. A long-standing hypothesis is that silencing involves creating chromatin structure that is repressive to gene transcription. We demonstrate by electron microscopy that core components of Polycomb Repressive Complex 1 induce compaction of defined nucleosomal arrays. Compaction by Polycomb proteins requires nucleosomes but not histone tails. Each Polycomb complex can compact about three nucleosomes. A region of Posterior Sex Combs that is important for gene silencing in vivo is also important for chromatin compaction, linking the two activities. This mechanism of chromatin compaction might be central to stable gene silencing by the Polycomb group.