CDKN1C (encoding tumor suppressor p57(KIP2)) is a cyclin-dependent kinase (CDK) inhibitor whose family members are often transcriptionally downregulated in human cancer via promoter DNA methylation. In this study, we show that CDKN1C is repressed in breast cancer cells mainly through histone modifications. In particular, we show that CDKN1C is targeted by histone methyltransferase EZH2-mediated histone H3 lysine 27 trimethylation (H3K27me3), and can be strongly activated by inhibition of EZH2 in synergy with histone deacetylase inhibitor. Consistent with the overexpression of EZH2 in a variety of human cancers including breast cancer, CDKN1C in these cancers is downregulated, and breast tumors expressing low levels of CDKN1C are associated with a poor prognosis. We further show that assessing both EZH2 and CDKN1C expression levels as a measurement of EZH2 pathway activity provides a more predictive power of disease outcome than that achieved with EZH2 or CDKN1C alone. Taken together, our study reveals a novel epigenetic mechanism governing CDKN1C repression in breast cancer. Importantly, as a newly identified EZH2 target with prognostic value, it has implications in patient stratification for cancer therapeutic targeting EZH2-mediated gene repression.