Repression of repetitive DNA is important for maintaining genomic stability, but is often perturbed in cancer. For instance, the megabase satellite domain at chromosome 1q12 is a common site of genetic rearrangements, such as translocations and deletions. Polycomb-group (PcG) proteins can be observed as large subnuclear domains called polycomb bodies, the composition and cellular function of which has remained elusive. This study, demonstrates that polycomb bodies are canonical subunits of the multiprotein polycomb repressive complex 1 (PRC1) deposited on 1q12 pericentromeric satellite DNA, which are normally maintained as constitutive heterochromatin by other mechanisms. Furthermore, the data reveal that polycomb bodies are exclusive to premalignant and malignant cells, being absent in normal cells. For instance, polycomb bodies are present in melanocytic cells of nevi and conserved in primary and metastatic melanomas. Deposition of polycomb on the 1q12 satellite DNA in melanoma development correlated with reduced DNA methylation levels. In agreement with this, inhibition of DNA methyltransferases (DNMTs), with the hypomethylating agent guadecitabine (SGI-110), was sufficient for polycomb body formation on pericentromeric satellites in primary melanocytes. This suggests that polycomb bodies form in cancer cells with global DNA demethylation to control the stability of pericentromeric satellite DNA. These results reveal a novel epigenetic perturbation specific to premalignant and malignant cells that may be used as an early diagnostic marker for detection of precancerous changes and a new therapeutic entry point.