Eukaryotic cells use guided search to coordinately control dispersed genetic elements. Argonaute proteins and their small RNA cofactors engage nascent RNAs and chromatin-associated proteins to direct transcriptional silencing. The small ubiquitin-like modifier (SUMO) has been shown to promote the formation and maintenance of silent chromatin (called heterochromatin) in yeast, plants, and animals. Here, we show that Argonaute-directed transcriptional silencing in Caenorhabditis elegans requires SUMOylation of the type 1 histone deacetylase HDA-1. Our findings suggest how SUMOylation promotes the association of HDAC1 with chromatin remodeling factors and with a nuclear Argonaute to initiate de novo heterochromatin silencing.