Human centromeres appear as constrictions on mitotic chromosomes and form a platform for kinetochore assembly in mitosis. Biophysical experiments led to a suggestion that repetitive DNA at centromeric regions form a compact scaffold necessary for function, but this was revised when neocentromeres were discovered on non-repetitive DNA. To test whether centromeres have a special chromatin structure we have analysed the architecture of a neocentromere. Centromere formation is accompanied by RNA pol II recruitment and active transcription to form a decompacted, negatively supercoiled domain enriched in ‘open’ chromatin fibres. In contrast, centromerisation causes a spreading of repressive epigenetic marks to surrounding regions, delimited by H3K27me3 polycomb boundaries and divergent genes. This flanking domain is transcriptionally silent and partially remodelled to form ‘compact’ chromatin, similar to satellite-containing DNA sequences, and exhibits genomic instability. We suggest transcription disrupts chromatin to provide a foundation for kinetochore formation whilst compact pericentromeric heterochromatin generates mechanical rigidity.