Epigenetic regulation involves reversible changes in DNA methylation and/or histone modification patterns. Short interfering RNAs (siRNAs) can direct DNA methylation and heterochromatic histone modifications, causing sequence-specific transcriptional gene silencing. In animals and yeast, histone H2B is known to be monoubiquitinated, and this regulates the methylation of histone H3 (refs 10, 11). However, the relationship between histone ubiquitination and DNA methylation has not been investigated. Here we show that mutations in an Arabidopsis deubiquitination enzyme, SUP32/UBP26, decrease the dimethylation on lysine 9 of H3, suppress siRNA-directed methylation of DNA and release heterochromatic silencing of transgenes as well as transposons. We found that Arabidopsis histone H2B is monoubiquitinated at lysine 143 and that the levels of ubiquitinated H2B and trimethyl H3 at lysine 4 increase in sup32 mutant plants. SUP32/UBP26 can deubiquitinate H2B, and chromatin immunoprecipitation assays suggest an association between H2B ubiquitination and release of silencing. These data suggest that H2B deubiquitination by SUP32/UBP26 is required for heterochromatic histone H3 methylation and DNA methylation.