Sumoylation is a posttranslational modification essential for multiple cellular functions in eukaryotes. ULP-2 is a conserved SUMO protease required for embryonic development in Caenorhabditis elegans . Here, we revealed that ULP-2 controls germline development by regulating the PHD-SET domain protein, SET-26. Specifically, loss of ULP-2 results in sterility and a progressive elevation of global protein sumoylation. In the germline of ulp-2 null mutant, meiosis is arrested at the diplotene stage and the cells in the proximal germline acquire a somatic fate. Germline RNAseq analysis revealed the down-regulation of numerous germline genes in ulp-2 mutants, whereas somatic gene expression is up-regulated. To determine the key factors that are regulated by ULP-2, we performed a yeast two-hybrid screen and identified the histone methylation reader, SET-26 as a ULP-2 interacting protein. Loss of SET-26 enhanced the sterility of ulp-2 mutant animals. Consistently, SET-26 is sumoylated and its sumoylation levels are regulated by ULP-2. Moreover, we detected a reduction in H3K4 tri-methylation (H3K4me3) histone levels bound to SET-26 in the ulp-2 mutant background suggesting a dependence of this histone reader on balanced sumoylation. Finally, a comparative proteomics screen between WT and ulp-2 loss of activity identified the predicted methyltransferase SET-27 as a ULP-2-dependent SET-26-associated protein. SET-27 knockout genetically interacts with ULP-2 in the germline, but not with SET-26. Taken together, we revealed a SUMO protease/H3K4me3 histone reader axis which is required for the maintenance and regulation of germline development.