Covalent modifications of chromatin have emerged as key determinants of the genome's transcriptional competence. Histone H3 lysine 9 (H3K9) methylation is an epigenetic signal that is recognized by HP1 and correlates with gene silencing in a variety of organisms. Discovery of the enzymes that catalyze H3K9 methylation has identified a second gene-specific function for this modification in transcriptional repression. Whether H3K9 methylation is causative in the initiation and establishment of gene repression or is a byproduct of the process leading to the repressed state remains unknown. To investigate the role of HMTs and specifically H3K9 methylation in gene repression, we have employed engineered zinc-finger transcription factors (ZFPs) to target HMT activity to a specific endogenous gene. By utilizing ZFPs that recognize the promoter of the endogenous VEGF-A gene, and thus employing this chromosomal locus as an in vivo reporter, we show that ZFPs linked to a minimal catalytic HMT domain affect local methylation of histone H3K9 and the consequent repression of target gene expression. Furthermore, amino acid substitutions within the HMT that ablate its catalytic activity effectively eliminate the ability of the ZFP fusions to repress transcription. Thus, H3K9 methylation is a primary signal that is sufficient for initiating a gene repression pathway in vivo.