Upon herpesvirus infection, viral DNA becomes associated with nuclear structures known as nuclear domain 10 (ND10). The role of ND10 during herpesvirus infection has long been contentious; data arguing for a role for ND10 in repression of infection have been countered by other data showing little effect of ND10 on virus infection. Here we show that knockdown of human Daxx (hDaxx) expression, an important component of ND10, prior to infection with human cytomegalovirus resulted in increased levels of viral immediate early RNA and protein expression and that this correlated with an increased association of the major immediate early promoter with markers of transcriptionally active chromatin. Conversely, we also show that stable overexpression of hDaxx renders cells refractory to cytomegalovirus immediate early gene expression. Intriguingly, this hDaxx-mediated repression appears to be restricted to cells stably overexpressing hDaxx and is not recapitulated in transient transfection assays. Finally, hDaxx-mediated repression of cytomegalovirus major immediate early gene expression was overcome by infecting at higher virus titers, suggesting that an incoming viral structural protein or viral DNA is responsible for overcoming the repression of viral gene expression in hDaxx superexpressing cells. These data suggest that hDaxx in ND10 functions at the site of cytomegalovirus genome deposition to repress transcription of incoming viral genomes and that this repression is mediated by a direct and immediate effect of hDaxx on chromatin modification around the viral major immediate early promoter.