Studies of Schizosaccharomyces pombe and mammalian cells identified a series of histone modifications that result in transcriptional repression. Lysine 9 of histone H3 (H3K9) is deacetylated by the NuRD complex, methylated by a histone methyltransferase (HMT) and then bound by a chromodomain-containing protein, such as heterochromatin protein 1 (HP1), leading to transcriptional repression. A Caenorhabditis elegans NuRD-like complex and HP1 homologs regulate vulval development, but no HMT is known to act in this process. We surveyed all 38 putative HMT genes in C. elegans and identified met-1 and met-2 as negative regulators of vulval cell-fate specification. met-1 is homologous to Saccharomyces cerevisiae Set2, an H3K36 HMT that prevents the ectopic initiation of transcription. met-2 is homologous to human SETDB1, an H3K9 HMT that represses transcription. met-1 and met-2 (1) are each required for the normal trimethylation of both H3K9 and H3K36; (2) act redundantly with each other as well as with the C. elegans HP1 homologs; and (3) repress transcription of the EGF gene lin-3, which encodes the signal that induces vulval development. We propose that as is the case for Set2 in yeast, MET-1 prevents the reinitiation of transcription. Our results suggest that in the inhibition of vulval development, homologs of SETDB1, HP1 and the NuRD complex act with this H3K36 HMT to prevent ectopic transcriptional initiation.