Histone post-translational modifications regulate chromatin structure and function largely through interactions with effector proteins that often contain multiple histone-binding domains. While significant progress has been made characterizing individual effector domains, the role of paired domains and how they function in a combinatorial fashion within chromatin are poorly defined. Here we show that the linked tandem Tudor and plant homeodomain (PHD) of UHRF1 (ubiquitin-like PHD and RING finger domain-containing protein 1) operates as a functional unit in cells, providing a defined combinatorial readout of a heterochromatin signature within a single histone H3 tail that is essential for UHRF1-directed epigenetic inheritance of DNA methylation. These findings provide critical support for the "histone code" hypothesis, demonstrating that multivalent histone engagement plays a key role in driving a fundamental downstream biological event in chromatin.