The histone methyltransferase SETDB1 plays a central role in repressive chromatin processes, but the functional requirement for its binding partner ATF7IP has remained enigmatic. Here, we show that ATF7IP is essential for SETDB1 stability: nuclear SETDB1 protein is degraded by the proteasome upon ablation of ATF7IP. As a result, ATF7IP is critical for repression that requires H3K9 trimethylation by SETDB1, including transgene silencing by the HUSH complex. Furthermore, we show that loss of ATF7IP phenocopies loss of SETDB1 in genome-wide assays. ATF7IP and SETDB1 knockout cells exhibit near-identical defects in the global deposition of H3K9me3, which results in similar dysregulation of the transcriptome. Overall, these data identify a critical functional role for ATF7IP in heterochromatin formation by regulating SETDB1 abundance in the nucleus.