Abstract DNA methylation is a conserved epigenetic modification that is typically associated with silencing of transposable elements and promoter methylated genes. However, some DNA-methylated loci are protected from silencing, allowing transcriptional flexibility in response to environmental and developmental cues. Through a genetic screen in Arabidopsis (Arabidopsis thaliana), we uncovered an antagonistic relationship between the MICRORCHIDIA (MORC) protein and the IMITATION SWITCH (ISWI) complex in regulating the DNA-methylated SUPPRESSOR OF DRM1 DRM2 CMT3 (SDC) reporter. We demonstrate that components of the plant-specific ISWI complex, including CHROMATIN REMODELING PROTEIN11 (CHR11), CHR17, DDT-RELATED PROTEIN4 (DDR4), and DDR5, function to partially derepress silenced genes and transposable elements (TEs), through their function in regulating nucleosome distribution. This action also requires the known transcriptional activator DNAJ proteins, providing a mechanistic link between nucleosome remodeling and transcriptional activation. Genome-wide studies revealed that DDR4 causes changes in nucleosome distribution at numerous loci, a subset of which is associated with changes in DNA methylation and/or transcription. Our work reveals a mechanism for balancing transcriptional flexibility and faithful silencing of DNA-methylated loci. As both ISWI and MORC family genes are widely distributed across plant and animal species, our findings may represent a conserved eukaryotic mechanism for fine-tuning gene expression under epigenetic regulation.