Regulation of genes that initiate and amplify inflammatory programs of gene expression is achieved by signal-dependent exchange of coregulator complexes that function to read, write, and erase specific histone modifications linked to transcriptional activation or repression. Here, we provide evidence for the role of trimethylated histone H4 lysine 20 (H4K20me3) as a repression checkpoint that restricts expression of toll-like receptor 4 (TLR4) target genes in macrophages. H4K20me3 is deposited at the promoters of a subset of these genes by the SMYD5 histone methyltransferase through its association with NCoR corepressor complexes. Signal-dependent erasure of H4K20me3 is required for effective gene activation and is achieved by NF-κB-dependent delivery of the histone demethylase PHF2. Liver X receptors antagonize TLR4-dependent gene activation by maintaining NCoR/SMYD5-mediated repression. These findings reveal a histone H4K20 trimethylation/demethylation strategy that integrates positive and negative signaling inputs that control immunity and homeostasis.