Eukaryotes regulate the effective dosage of their ribosomal RNA (rRNA) genes, expressing fewer than half of the genes at any one time. Likewise, genetic hybrids displaying nucleolar dominance transcribe rRNA genes inherited from one parent but silence the other parental set. We show that rRNA gene dosage control and nucleolar dominance utilize a common mechanism. Central to the mechanism is an epigenetic switch in which concerted changes in promoter cytosine methylation density and specific histone modifications dictate the on and off states of the rRNA genes. A key component of the off switch is HDT1, a plant-specific histone deacetylase that localizes to the nucleolus and is required for H3 lysine 9 deacetylation and subsequent H3 lysine 9 methylation. Collectively, the data support a model in which cytosine methylation and histone deacetylation are each upstream of one another in a self-reinforcing repression cycle.