Eukaryotic genomes are organized into domains of differing structure and activity. There is evidence that the domain organization of the genome regulates its activity, yet our understanding of domain properties and the factors that influence their formation is poor. Here, we use chromatin state analyses in early embryos and third-larval stage (L3) animals to investigate genome domain organization and its regulation in Caenorhabditis elegans At both stages we find that the genome is organized into extended chromatin domains of high or low gene activity defined by different subsets of states, and enriched for H3K36me3 or H3K27me3, respectively. The border regions between domains contain large intergenic regions and a high density of transcription factor binding, suggesting a role for transcription regulation in separating chromatin domains. Despite the differences in cell types, overall domain organization is remarkably similar in early embryos and L3 larvae, with conservation of 85% of domain border positions. Most genes in high-activity domains are expressed in the germ line and broadly across cell types, whereas low-activity domains are enriched for genes that are developmentally regulated. We find that domains are regulated by the germ-line H3K36 methyltransferase MES-4 and that border regions show striking remodeling of H3K27me1, supporting roles for H3K36 and H3K27 methylation in regulating domain structure. Our analyses of C. elegans chromatin domain structure show that genes are organized by type into domains that have differing modes of regulation.