The centromere is a genetic locus, required for faithful chromosome segregation, where spindle Wbers attach to the chromosome through kinetochore. Loss of centromere or formation of multiple centromeres on a single chromosome leads to chromosome missegregation or chromosome breakage, respectively, which are detrimental for Wtness and survival of a cell. Therefore, understanding the mechanism of centromere locus determination on the chromosome and perpetuation of such a locus in subsequent generation (known as centromere identity) is very fundamental to combat conditions like aneuploidy, spontaneous abortion, developmental defects, cell lethality and cancer. Recent studies have come up with different models to explain centromere identity. However, the exact mechanism still remains elusive. It has been observed that most eukaryotic centromeres are determined epigenetically rather than by a DNA sequence. The epigenetic marks that are instrumental in determining centromere identity are the histone H3 variant, CENP-A and the specialized posttranslational modification of the core histones. Here we will review the recent studies on the factors responsible for generating unique centromeric chromatin and how it perpetuates during cell division giving the present-day models. We will further focus on the probable mechanism of de novo centromere formation with an example of neocentromere. As a matter of similitude, this review will include marking extrachromosomal chromatin to be served as a partitioning locus by deposition of CENP-A homolog in budding yeast. © Springer-Verlag 2010.