To regulate gene expression, the macromolecular components of the mammalian interphase nucleus are spatially organized into a myriad of functional compartments. Over the past decade, increasingly sophisticated genomics, microscopy, and functional approaches have probed this organization in unprecedented detail. These investigations have linked chromatin-associated noncoding RNAs to specific nuclear compartments and uncovered mechanisms by which these RNAs establish such domains. In this review, we focus on the long non-coding RNA Xist and summarize new evidence demonstrating the significance of chromatin reconfiguration in creating the inactive X-chromosome compartment. Differences in chromatin compaction correlate with distinct levels of gene repression on the X-chromosome, potentially explaining how human XIST can induce chromosome-wide dampening and silencing of gene expression at different stages of human development.