SUMO modification of transcription factors is linked to repression of transcription. The physiological significance of SUMO attachment to a particular transcriptional regulator, however, is largely unknown. We have employed the ubiquitously expressed murine transcription factor Sp3 to analyze the role of SUMOylation in vivo. We generated mice and mouse embryonic fibroblasts (MEFs) carrying a subtle point mutation in the SUMO attachment sequence of Sp3 (IKEE(553)D mutation). The E(553)D mutation impedes SUMOylation of Sp3 at K(551)in vivo, without affecting Sp3 protein levels. Expression profiling revealed that spermatocyte-specific genes, such as Dmc1 and Dnahc8, and neuronal genes, including Paqr6, Rims3, and Robo3, are de-repressed in non-testicular and extra-neuronal mouse tissues and in mouse embryonic fibroblasts expressing the SUMOylation-deficient Sp3E(553)D mutant protein. Chromatin immunoprecipitation experiments show that transcriptional de-repression of these genes is accompanied by the loss of repressive heterochromatic marks such as H3K9 and H4K20 tri-methylation and impaired recruitment of repressive chromatin-modifying enzymes. Finally, analysis of the DNA methylation state of the Dmc1, Paqr6, and Rims3 promoters by bisulfite sequencing revealed that these genes are highly methylated in Sp3wt MEFs but are unmethylated in Sp3E(553)D MEFs linking SUMOylation of Sp3 to tissue-specific CpG methylation. Our results establish SUMO conjugation to Sp3 as a molecular beacon for the assembly of repression machineries to maintain tissue-specific transcriptional gene silencing.