The Mll gene is a member of the mammalian trithorax group, involved with the antagonistic Polycomb group in epigenetic regulation of homeotic genes. MLL contains a highly conserved SET domain also found in various chromatin proteins. In this study, we report that mice in which this domain was deleted by homologous recombination in ES cells (DeltaSET) exhibit skeletal defects and altered transcription of particular Hox genes during development. Chromatin immunoprecipitation and bisulfite sequencing analysis on developing embryo tissues demonstrate that this change in gene expression is associated with a dramatic reduction in histone H3 Lysine 4 monomethylation and DNA methylation defects at the same Hox loci. These results establish in vivo that the major function of Mll is to act at the chromatin level to sustain the expression of selected target Hox genes during embryonic development. These observations provide previously undescribed evidence for the in vivo relationship and SET domain dependence between histone methylation and DNA methylation on MLL target genes during embryonic development.