Post-translational modification of proteins by the ubiquitin-like molecule SUMO (sumoylation) regulates their subcellular localization and affects their functional properties in vitro, but the physiological function of sumoylation in multicellular organisms is largely unknown. Here, we show that the C. elegans Polycomb group (PcG) protein SOP-2 interacts with the SUMO-conjugating enzyme UBC-9 through its evolutionarily conserved SAM domain. Sumoylation of SOP-2 is required for its localization to nuclear bodies in vivo and for its physiological repression of Hox genes. Global disruption of sumoylation phenocopies a sop-2 mutation by causing ectopic Hox gene expression and homeotic transformations. Chimeric constructs in which the SOP-2 SAM domain is replaced with that derived from fruit fly or mammalian PcG proteins, but not those in which the SOP-2 SAM domain is replaced with the SAM domains of non-PcG proteins, confer appropriate in vivo nuclear localization and Hox gene repression. These observations indicate that sumoylation of PcG proteins, modulated by their evolutionarily conserved SAM domain, is essential to their physiological repression of Hox genes.