Mammalian IκB proteins (IκBs) exert their main function as negative regulators of NF-κB, a central signaling pathway controlling immunity and inflammation. An alternative chromatin role for IκBs has been shown to affect stemness and cell differentiation. However, the involvement of NF-κB in this function has not been excluded. NFKI-1 and IKB-1 are IκB homologs in Caenorhabditis elegans, which lacks NF-κB nuclear effectors. We found that nfki-1 and ikb-1 mutants display developmental defects that phenocopy mutations in Polycomb and UTX-1 histone demethylase, suggesting a role for C. elegans IκBs in chromatin regulation. Further supporting this possibility (1) we detected NFKI-1 in the nucleus of cells; (2) NFKI-1 and IKB-1 bind to histones and Polycomb proteins, (3) and associate with chromatin in vivo, and (4) mutations in nfki-1 and ikb-1 alter chromatin marks. Based on these results, we propose that ancestral IκB inhibitors modulate Polycomb activity at specific gene subsets with an impact on development.