METTL3 (methyltransferase-like 3) mediates the N6-methyladenosine (m6A) methylation of mRNA, which affects the stability of mRNA and its translation into protein1. METTL3 also binds chromatin2-4, but the role of METTL3 and m6A methylation in chromatin is not fully understood. Here we show that METTL3 regulates mouse embryonic stem-cell heterochromatin, the integrity of which is critical for silencing retroviral elements and for mammalian development5. METTL3 predominantly localizes to the intracisternal A particle (IAP)-type family of endogenous retroviruses. Knockout of Mettl3 impairs the deposition of multiple heterochromatin marks onto METTL3-targeted IAPs, and upregulates IAP transcription, suggesting that METTL3 is important for the integrity of IAP heterochromatin. We provide further evidence that RNA transcripts derived from METTL3-bound IAPs are associated with chromatin and are m6A-methylated. These m6A-marked transcripts are bound by the m6A reader YTHDC1, which interacts with METTL3 and in turn promotes the association of METTL3 with chromatin. METTL3 also interacts physically with the histone 3 lysine 9 (H3K9) tri-methyltransferase SETDB1 and its cofactor TRIM28, and is important for their localization to IAPs. Our findings demonstrate that METTL3-catalysed m6A modification of RNA is important for the integrity of IAP heterochromatin in mouse embryonic stem cells, revealing a mechanism of heterochromatin regulation in mammals.