Lysine methylation on histone tails impacts genome regulation and cell fate determination in many developmental processes. Apicomplexa intracellular parasites cause major diseases and they have developed complex life cycles with fine-tuned differentiation events. Yet, apicomplexa genomes have few transcription factors and little is known about their epigenetic control systems. Tick-borne Theileria apicomplexa species have relatively small, compact genomes and a remarkable ability to transform leukocytes in their bovine hosts. Here we report enriched H3 lysine 18 monomethylation (H3K18me1) on the gene bodies of repressed genes in Theileria macroschizonts. Differentiation to merozoites (merogony) led to decreased H3K18me1 in parasite nuclei. Pharmacological manipulation of H3K18 acetylation or methylation impacted parasite differentiation and expression of stage-specific genes. Finally, we identified a parasite SET-domain methyltransferase (TaSETup1) that can methylate H3K18 and represses gene expression. Thus, H3K18me1 emerges as an important epigenetic mark which controls gene expression and stage differentiation in Theileria parasites.