ABSTRACT Condensins are evolutionarily conserved protein complexes that are required for chromosome segregation during cell division and genome organization during interphase. In C. elegans ,, a specialized condensin, which forms the core of the dosage compensation complex (DCC), binds to and represses X chromosome transcription. Here, we analyzed DCC localization and the effect of DCC depletion on histone modifications, transcription factor binding, and gene expression using ChIP-seq and mRNA-seq. Across the X, DCC accumulates at accessible gene regulatory sites in active chromatin and not heterochromatin. DCC is required for reducing the levels of activating histone modifications, including H3K4me3 and H3K27ac, but not repressive modification H3K9me3. In X-to-autosome fusion chromosomes, DCC spreading into the autosomal sequences locally reduces gene expression, thus establishing a direct link between DCC binding and repression. Together, our results indicate that DCC-mediated transcription repression is associated with a reduction in the activity of X chromosomal gene regulatory elements. SUMMARY Condensins are evolutionarily conserved protein complexes that mediate chromosome condensation during cell division and have been implicated in gene regulation during interphase. Here, we analyzed the gene regulatory role of an X-specific condensin (DCC) in C. elegans , by measuring its effect on histone modifications associated with transcription regulation. We found that in X-to-autosome fusion chromosomes, DCC spreading into autosomal sequences locally reduces gene expression, establishing a direct link between DCC binding and repression. DCC is required for reduced levels of histone modifications associated with transcription activation at X chromosomal promoters and enhancers. These results are consistent with a model whereby DCC binding directly or indirectly results in a reduction in the activity of X chromosomal gene regulatory elements through specific activating histone modifications.