Polycomb Repressive Complex 2 (PRC2)-mediated histone H3K27 tri-methylation (H3K27me3) recruits canonical PRC1 (cPRC1) to maintain heterochromatin. In early development, polycomb-regulated genes are connected through long-range 3D interactions which resolve upon differentiation. Here, we report that polycomb looping is controlled by H3K27me3 spreading and regulates target gene silencing and cell fate specification. Using glioma-derived H3 Lys-27-Met (H3K27M) mutations as tools to restrict H3K27me3 deposition, we show that H3K27me3 confinement concentrates the chromatin pool of cPRC1, resulting in heightened 3D interactions mirroring chromatin architecture of pluripotency, and stringent gene repression that maintains cells in progenitor states to facilitate tumor development. Conversely, H3K27me3 spread in pluripotent stem cells, following neural differentiation or loss of the H3K36 methyltransferase NSD1, dilutes cPRC1 concentration and dissolves polycomb loops. These results identify the regulatory principles and disease implications of polycomb looping and nominate histone modification-guided distribution of reader complexes as an important mechanism for nuclear compartment organization.The confinement of H3K27me3 at PRC2 nucleation sites without its spreading correlates with increased 3D chromatin interactions.The H3K27M oncohistone concentrates canonical PRC1 that anchors chromatin loop interactions in gliomas, silencing developmental programs.Stem and progenitor cells require factors promoting H3K27me3 confinement, including H3K36me2, to maintain cPRC1 loop architecture.The cPRC1-H3K27me3 interaction is a targetable driver of aberrant self-renewal in tumor cells.

H3K27me3 spreading organizes canonical PRC1 chromatin architecture to regulate developmental programs