For Plasmodium falciparum, the most widespread and virulent malaria parasite that infects humans, persistence depends on continuous asexual replication in red blood cells, while transmission to their mosquito vector requires asexual blood-stage parasites to differentiate into non-replicating gametocytes. This decision is controlled by stochastic derepression of a heterochromatin-silenced locus encoding AP2-G, the master transcription factor of sexual differentiation. The frequency of ap2-g derepression was shown to be responsive to extracellular phospholipid precursors but the mechanism linking these metabolites to epigenetic regulation of ap2-g was unknown. Through a combination of molecular genetics, metabolomics and chromatin profiling, we show that this response is mediated by metabolic competition for the methyl donor S-adenosylmethionine between histone methyltransferases and phosphoethanolamine methyltransferase, a critical enzyme in the parasite's pathway for de novo phosphatidylcholine synthesis. When phosphatidylcholine precursors are scarce, increased consumption of SAM for de novo phosphatidylcholine synthesis impairs maintenance of the histone methylation responsible for silencing ap2-g, increasing the frequency of derepression and sexual differentiation. This provides a key mechanistic link that explains how LysoPC and choline availability can alter the chromatin status of the ap2-g locus controlling sexual differentiation.