Heterochromatin spreading leads to the silencing of genes within its path, and boundary elements have evolved to constrain such spreading. In fission yeast, heterochromatin at centromeres I and III is flanked by inverted repeats termed IRCs, which are required for proper boundary functions. However, the mechanisms by which IRCs prevent heterochromatin spreading are unknown. Here, we identified Bdf2, which is homologous to the mammalian bromodomain and extraterminal (BET) family double bromodomain proteins involved in diverse types of cancers, as a factor required for proper boundary function at IRCs. Bdf2 is enriched at IRCs through its interaction with the boundary protein Epe1. The bromodomains of Bdf2 recognize acetylated histone H4 tails and antagonize Sir2-mediated deacetylation of histone H4K16. Furthermore, abolishing H4K16 acetylation (H4K16ac) with an H4K16R mutation promotes heterochromatin spreading, and mimicking H4K16ac by an H4K16Q mutation blocks heterochromatin spreading at IRCs. Our results thus illustrate a mechanism of establishing chromosome boundaries at specific sites through the recruitment of a factor that protects euchromatic histone modifications. They also reveal a previously unappreciated function of H4K16ac in cooperation with H3K9 methylation to regulate heterochromatin spreading.