Transcriptional regulators such as the glucocorticoid receptor (GR) recruit multiple cofactors to activate or repress transcription. Although most cofactors are intrinsically bifunctional, little is known about the molecular mechanisms dictating the specific polarity of regulation. Furthermore, chromatin modifications thought to be confined to silent loci appear in actively transcribed genes suggesting that similar enzymatic activities may mediate constitutive and transient chromatin states. GRIP1, a GR ligand-dependent coregulator of the p160 family can potentiate or inhibit transcription but the molecular contexts and mechanisms that enable GRIP1 corepressor activity are poorly understood. In a yeast 2-hybrid screen with GRIP1 repression domain (RD)-containing fragment, we repeatedly isolated the C-terminal region of a SET domain-containing protein subsequently identified as histone H4 lysine 20 trimethyltransferase, Suv4-20h1. We cloned a full-length Suv4-20h1 and dissected its interaction with GRIP1 in yeast, in vitro, and in mammalian cells. Strict nuclear localization and high salt concentration required for Suv4-20h1 extraction were consistent with its tight association with chromatin. Overexpression of Suv4-20h1 in human U2OS and A549 cells expressing integrated and endogenous GR, respectively, antagonized ligand-dependent induction of a subset of GR target genes, whereas Suv4-20h1 siRNA-mediated depletion had a reciprocal effect. Inhibition of GR transactivation required both the GRIP1 interacting region of Suv4-20h1 and its catalytic activity. Thus, Suv4-20h1 known exclusively as a factor involved in constitutive heterochromatin maintenance, actively participates in hormone-dependent transcriptional regulation affecting GR target gene expression in a promoter- and cell type-specific manner.