Jarid2/Jumonji, the founding member of the Jmj factor family, critically regulates various developmental processes, including cardiovascular development. The Jmj family was identified as histone demethylases, indicating epigenetic regulation by Jmj proteins. Deletion of Jarid2 in mice resulted in cardiac malformation and increased endocardial Notch1 expression during development. Although Jarid2 has been shown to occupy the Notch1 locus in the developing heart, the precise molecular role of Jarid2 remains unknown. Here we show that deletion of Jarid2 results in reduced methylation of lysine 9 on histone H3 (H3K9) at the Notch1 genomic locus in embryonic hearts. Interestingly, SETDB1, a histone H3K9 methyltransferase, was identified as a putative cofactor of Jarid2 by yeast two-hybrid screening, and the physical interaction between Jarid2 and SETDB1 was confirmed by coimmunoprecipitation experiments. Concurrently, accumulation of SETDB1 at the site of Jarid2 occupancy was significantly reduced in Jarid2 knock out (KO) hearts. Employing genome-wide approaches, putative Jarid2 target genes regulated by SETDB1 via H3K9 methylation were identified in the developing heart by ChIP-chip. These targets are involved in biological processes that, when dysregulated, could manifest in the phenotypic defects observed in Jarid2 KO mice. Our data demonstrate that Jarid2 functions as a transcriptional repressor of target genes, including Notch1, through a novel process involving the modification of H3K9 methylation via specific interaction with SETDB1 during heart development. Therefore, our study provides new mechanistic insights into epigenetic regulation by Jarid2, which will enhance our understanding of the molecular basis of other organ development and biological processes.