Cryptic transcription occurs widely across the eukaryotic genome; however, its regulation during vertebrate development is not understood. Here, we show that two class I histone deacetylases, Hdac1 and Hdac2, silence cryptic transcription to promote mitochondrial function in developing murine hearts. Mice lacking Hdac1 and Hdac2 in heart exhibit defective developmental switch from anaerobic to mitochondrial oxidative phosphorylation (OXPHOS), severe defects in mitochondrial mass, mitochondrial function, and complete embryonic lethality. Hdac1/Hdac2 promotes the transition to OXPHOS by enforcing transcriptional fidelity of metabolic gene programs. Mechanistically, Hdac1/Hdac2 deacetylates histone residues including H3K23, H3K14, and H4K16 to suppress cryptic transcriptional initiation within the coding regions of actively transcribed metabolic genes. Thus, Hdac1/2-mediated epigenetic silencing of cryptic transcription is essential for mitochondrial function during early vertebrate development.