Gene transcription is critically influenced by chromatin structure and the modification status of histone tails. Methylation of lysine residues in histone tails is dynamically regulated by the opposing activities of histone methyltransferases and histone demethylases. Here we show that JARID1C/SMCX, a JmjC-domain-containing protein implicated in X-linked mental retardation and epilepsy, possesses H3K4 tri-demethylase activity and functions as a transcriptional repressor. An SMCX complex isolated from HeLa cells contains additional chromatin modifiers (the histone deacetylases HDAC1 and HDAC2, and the histone H3K9 methyltransferase G9a) and the transcriptional repressor REST, suggesting a direct role for SMCX in chromatin dynamics and REST-mediated repression. Chromatin immunoprecipitation reveals that SMCX and REST co-occupy the neuron-restrictive silencing elements in the promoters of a subset of REST target genes. RNA-interference-mediated depletion of SMCX derepresses several of these targets and simultaneously increases H3K4 trimethylation at the sodium channel type 2A (SCN2A) and synapsin I (SYN1) promoters. We propose that loss of SMCX activity impairs REST-mediated neuronal gene regulation, thereby contributing to SMCX-associated X-linked mental retardation.