Suppressor of variegation 3-9 homolog 1 (SUV39H1), a histone methyltransferase, catalyzes histone 3 lysine 9 trimethylation and is involved in heterochromatin organization and genome stability. However, the mechanism for regulation of the enzymatic activity of SUV39H1 in cancer cells is not yet well known. In this study, we identified SET domain-containing protein 7 (SET7/9), a protein methyltransferase, as a unique regulator of SUV39H1 activity. In response to treatment with adriamycin, a DNA damage inducer, SET7/9 interacted with SUV39H1 in vivo, and a GST pull-down assay confirmed that the chromodomain-containing region of SUV39H1 bound to SET7/9. Western blot using antibodies specific for antimethylated SUV39H1 and mass spectrometry demonstrated that SUV39H1 was specifically methylated at lysines 105 and 123 by SET7/9. Although the half-life and localization of methylated SUV39H1 were not noticeably changed, the methyltransferase activity of SUV39H1 was dramatically down-regulated when SUV39H1 was methylated by SET7/9. Consequently, H3K9 trimethylation in the heterochromatin decreased significantly, which, in turn, led to a significant increase in the expression of satellite 2 (Sat2) and α-satellite (α-Sat), indicators of heterochromatin relaxation. Furthermore, a micrococcal nuclease sensitivity assay and an immunofluorescence assay demonstrated that methylation of SUV39H1 facilitated genome instability and ultimately inhibited cell proliferation. Together, our data reveal a unique interplay between SET7/9 and SUV39H1--two histone methyltransferases--that results in heterochromatin relaxation and genome instability in response to DNA damage in cancer cells.