Cockayne syndrome group B (CSB) protein plays a role in both transcription-coupled DNA repair and transcriptional regulation of all three classes of nuclear RNA polymerases. Here we show that a complex consisting of CSB, RNA polymerase I (Pol I), and histone methyltransferase G9a is present at active rRNA genes. G9a methylates histone H3 on lysine 9 (H3K9me2) in the pre-rRNA coding region and facilitates the association of heterochromatin protein 1gamma (HP1gamma) with rDNA. Both H3K9 methylation and HP1gamma association require ongoing transcription. Knockdown of CSB prevents the association of Pol I with rDNA, impairs the interaction of G9a with Pol I, and inhibits pre-rRNA synthesis. Likewise, knockdown of G9a leads to decreased levels of H3K9me2 in the transcribed region and downregulation of pre-rRNA synthesis. The results reveal the mechanism underlying CSB-mediated activation of rDNA transcription and link G9a-dependent H3K9 methylation to Pol I transcription elongation through chromatin.