The regulatory mechanisms of anthocyanin biosynthesis have been well documented at the transcriptional and translational levels. By contrast, how anthocyanin biosynthesis is epigenetically regulated remains largely unknown. In this study, we employed genetic, molecular biology, and chromatin immunoprecipitation-quantitative polymerase chain reaction assays to identify a regulatory module essential for repressing the expression of genes involved in anthocyanin biosynthesis through chromatin remodeling. We found that SILENCING DEFECTIVE 2 (SDE2), which was previously identified as a negative regulator for sucrose-induced anthocyanin accumulation in Arabidopsis, is cleaved into N-terminal SDE2-UBL and C-terminal SDE2-C fragments at the first diglycine motif, and the cleaved SDE2-C, which can fully complement the sde2 mutant, is localized in the nucleus and physically interacts with LIKE HETEROCHROMATIN PROTEIN 1 (LHP1) in vitro and in vivo. Genetic analyses showed that both SDE2 and LHP1 act as negative factors for anthocyanin biosynthesis. Consistently, immunoblot analysis revealed that the level of LHP1-bound histone H3 lysine 27 trimethylation (H3K27me3) significantly decreases in sde2 and lhp1 mutants, compared to wild-type (WT). In addition, we found that sugar can induce expression of SDE2 and LHP1, and enhance the level of the nucleus-localized SDE2-C. Taken together, our data suggest that the SDE2-C-LHP1 module is required for repression of gene expression through H3K27me3 modification during sugar-induced anthocyanin biosynthesis in Arabidopsis thaliana.