Epigenetic "readers" that recognize defined posttranslational modifications on histones have become desirable therapeutic targets for cancer and inflammation. SP140 is one such bromodomain- and plant homeodomain (PHD)-containing reader with immune-restricted expression, and single-nucleotide polymorphisms (SNPs) within SP140 associate with Crohn's disease (CD). However, the function of SP140 and the consequences of disease-associated SP140 SNPs have remained unclear. We show that SP140 is critical for transcriptional programs that uphold the macrophage state. SP140 preferentially occupies promoters of silenced, lineage-inappropriate genes bearing the histone modification H3K27me3, such as the HOXA cluster in human macrophages, and ensures their repression. Depletion of SP140 in mouse or human macrophages resulted in severely compromised microbe-induced activation. We reveal that peripheral blood mononuclear cells (PBMCs) or B cells from individuals carrying CD-associated SNPs within SP140 have defective SP140 messenger RNA splicing and diminished SP140 protein levels. Moreover, CD patients carrying SP140 SNPs displayed suppressed innate immune gene signatures in a mixed population of PBMCs that stratified them from other CD patients. Hematopoietic-specific knockdown of Sp140 in mice resulted in exacerbated dextran sulfate sodium (DSS)-induced colitis, and low SP140 levels in human CD intestinal biopsies correlated with relatively lower intestinal innate cytokine levels and improved response to anti-tumor necrosis factor (TNF) therapy. Thus, the epigenetic reader SP140 is a key regulator of macrophage transcriptional programs for cellular state, and a loss of SP140 due to genetic variation contributes to a molecularly defined subset of CD characterized by ineffective innate immunity, normally critical for intestinal homeostasis.