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The inflammatory cytokine interferon-γ (IFN-γ) orchestrates a diverse array of fundamental physiological processes. IFN-γ and the class II transactivator (CIITA) play essential roles in inhibiting muscle development during the inflammatory response. We describe the mechanism through which IFN-γ and CIITA inhibit myogenesis by repressing gene expression in muscle cells subjected to inflammation. In mice, the presence of increased amounts of circulating IFN-γ resulted in the increased abundance of Polycomb repressive complex 2 (PRC2) in muscle fibers, a tissue in which PRC2 is not normally present in the adult. We showed that CIITA first interacted with the Jumonji family protein JARID2, a noncatalytic subunit of PRC2, which caused an RNA polymerase II (RNAPII), phosphorylated at serine-5, to pause at target promoters. Additional subunits of the PRC2 complex, including the catalytic subunit EZH2, were then recruited in a JARID2-dependent manner that was concurrent with the loss of RNAPII and the methylation of Lys27 of histone H3 (H3K27), which is associated with gene repression. IFN-γ and CIITA act to both promote the abundance of PRC2 subunits, which are not normally present during muscle differentation, and recruit the PRC2 complex to block myogenesis. Together, these data indicate that increased amounts of IFN-γ reset myogenic cell fate through a multistep mechanism that culminates in the recruitment of PRC2 to silence muscle-specific genes.