AbstractRepetitive DNA elements are packaged in heterochromatin, but many require bursts of transcription to initiate and maintain long‐term silencing. The mechanisms by which these heterochromatic genome features are transcribed remain largely unknown. Here, we show that DOT1L, a conserved histone methyltransferase that modifies lysine 79 of histone H3 (H3K79), has a specialized role in transcription of major satellite repeats to maintain pericentromeric heterochromatin and genome stability. We find that H3K79me3 is selectively enriched relative to H3K79me2 at repetitive elements in mouse embryonic stem cells (mESCs), that DOT1L loss compromises pericentromeric satellite transcription, and that this activity involves possible coordination between DOT1L and the chromatin remodeler SMARCA5. Stimulation of transcript production from pericentromeric repeats by DOT1L participates in stabilization of heterochromatin structures in mESCs and cleavage‐stage embryos and is required for preimplantation viability. Our findings uncover an important role for DOT1L as a bridge between transcriptional activation of repeat elements and heterochromatin stability, advancing our understanding of how genome integrity is maintained and how chromatin state is set up during early development.