The DREAM (dimerization partner [DP], retinoblastoma [Rb]-like, E2F, and MuvB) complex controls cellular quiescence by repressing cell-cycle and other genes, but its mechanism of action is unclear. Here, we demonstrate that two C. elegans THAP domain proteins, LIN-15B and LIN-36, co-localize with DREAM and function by different mechanisms for repression of distinct sets of targets. LIN-36 represses classical cell-cycle targets by promoting DREAM binding and gene body enrichment of H2A.Z, and we find that DREAM subunit EFL-1/E2F is specific for LIN-36 targets. In contrast, LIN-15B represses germline-specific targets in the soma by facilitating H3K9me2 promoter marking. We further find that LIN-36 and LIN-15B differently regulate DREAM binding. In humans, THAP proteins have been implicated in cell-cycle regulation by poorly understood mechanisms. We propose that THAP domain proteins are key mediators of Rb/DREAM function.