The dynamic regulation of chromatin structure by histone post-translational modification is an essential regulatory mechanism that controls global gene transcription. The Kdm4 family of H3K9me2,3 and H3K36me2,3 dual specific histone demethylases has been implicated in development and tumorigenesis. Here we show that Drosophila Kdm4A and Kdm4B are together essential for mediating ecdysteroid hormone signaling during larval development. Loss of Kdm4 genes leads to globally elevated levels of the heterochromatin marker H3K9me2,3 and impedes transcriptional activation of ecdysone response genes, resulting in developmental arrest. We further show that Kdm4A interacts with the Ecdysone Receptor (EcR) and colocalizes with EcR at its target gene promoter. Our studies suggest that Kdm4A may function as a transcriptional co-activator by removing the repressive histone mark H3K9me2,3 from cognate promoters.