Parafibromin, a component of the RNA polymerase II-associated PAF1 complex, is a tumor suppressor linked to hyperparathyroidism-jaw tumor syndrome and sporadic parathyroid carcinoma. Parafibromin induces cell cycle arrest by repressing cyclin D1 via an unknown mechanism. Here, we show that parafibromin interacts with the histone methyltransferase, SUV39H1, and functions as a transcriptional repressor. The central region (128-227 amino acids) of parafibromin is important for both the interaction with SUV39H1 and transcriptional repression. Parafibromin associated with the promoter and coding regions of cyclin D1 and was required for the recruitment of SUV39H1 and the induction of H3 K9 methylation but not H3 K4 methylation. RNA interference analysis showed that SUV39H1 was critical for cyclin D1 repression. These data suggest that parafibromin plays an unexpected role as a repressor in addition to its widely known activity associated with transcriptional activation. Parafibromin as a part of the PAF1 complex might downregulate cyclin D1 expression by integrating repressive H3 K9 methylation during transcription.