A central goal of chromatin biology is to reveal how posttranslational histone marks modulate gene expression; however, relatively little is known about the spatial or temporal dynamics of these marks. We previously showed that a dynamic model of histone mark nucleation, propagation, and turnover fits the mean enrichment profiles from 99% of noncentromeric histone H3 lysine 9 trimethylation (H3K9me3) domains in mouse embryonic stem cells without the need for boundary or insulator elements. Here we report the full details of this “inherently bounded” model of histone modification dynamics and describe several dynamic features of the model using H3K9me3 as a paradigm. By analyzing the kinetic and structural constraints that drive formation of inherently bounded domains, we find that such domains are optimized when the rates of marking and turnover are comparable. Additionally, we find that to establish such domains, propagation of the histone marks must occur primarily through local contacts.