Retrovirus vectors are de novo methylated and transcriptionally silent in mammalian stem cells. Here, we identify epigenetic modifications that mark retrovirus-silenced transgenes. We show that murine stem cell virus (MSCV) and human immunodeficiency virus type 1 (HIV-1) vectors dominantly silence a linked locus control region (LCR) beta-globin reporter gene in transgenic mice. MSCV silencing blocks LCR hypersensitive site formation, and silent transgene chromatin is marked differentially by a histone code composed of abundant linker histone H1, deacetylated H3 and acetylated H4. Retrovirus-transduced embryonic stem (ES) cells are silenced predominantly 3 days post-infection, with a small subset expressing enhanced green fluorescent protein to low levels, and silencing is not relieved in de novo methylase-null [dnmt3a-/-;dnmt3b-/-] ES cells. MSCV and HIV-1 sequences also repress reporter transgene expression in Drosophila, demonstrating establishment of silencing in the absence of de novo and maintenance methylases. These findings provide mechanistic insight into a conserved gene silencing mechanism that is de novo methylase independent and that epigenetically marks retrovirus chromatin with a repressive histone code.