The malaria parasite Plasmodium falciparum undergoes antigenic variation to evade host immune responses through switching expression of variant surface proteins encoded by the var gene family. We demonstrate that both a subtelomeric transgene and var genes are subject to reversible gene silencing. Var gene silencing involves the SIR complex as gene disruption of PfSIR2 results in activation of this gene family. We also demonstrate that perinuclear gene activation involves chromatin alterations and repositioning into a location that may be permissive for transcription. Together, this implies that locus repositioning and heterochromatic silencing play important roles in the epigenetic regulation of virulence genes in P. falciparum.