Abstract Transcriptional regulation is dependent upon the interactions between the RNA pol II holoenzyme complex and chromatin. RNA pol II is part of a highly conserved multiprotein complex that includes the core mediator and CDK8 subcomplex. In Saccharomyces cerevisiae, the CDK8 subcomplex, composed of Ssn2p, Ssn3p, Ssn8p, and Srb8p, is thought to play important roles in mediating transcriptional control of stress-responsive genes. Also central to transcriptional control are histone post-translational modifications. Lysine methylation, dynamically balanced by lysine methyltransferases and demethylases, has been intensively studied, uncovering significant functions in transcriptional control. A key question remains in understanding how these enzymes are targeted during stress response. To determine the relationship between lysine methylation, the CDK8 complex, and transcriptional control, we performed phenotype analyses of yeast lacking known lysine methyltransferases or demethylases in isolation or in tandem with SSN8 deletions. We show that the RNA pol II CDK8 submodule components SSN8/SSN3 and the histone demethylase JHD2 are required to inhibit pseudohyphal growth—a differentiation pathway induced during nutrient limitation—under rich conditions. Yeast lacking both SSN8 and JHD2 constitutively express FLO11, a major regulator of pseudohyphal growth. Interestingly, deleting known FLO11 activators including FLO8, MSS11, MFG1, TEC1, SNF1, KSS1, and GCN4 results in a range of phenotypic suppression. Using chromatin immunoprecipitation, we found that SSN8 inhibits H3 Lys4 trimethylation independently of JHD2 at the FLO11 locus, suggesting that H3 Lys4 hypermethylation is locking FLO11 into a transcriptionally active state. These studies implicate the CDK8 subcomplex in fine-tuning H3 Lys4 methylation levels during pseudohyphal differentiation.