Dominant mutations in the MORC2 gene have recently been shown to cause axonal Charcot-Marie-Tooth (CMT) disease, but the cellular function of MORC2 is poorly understood. Here, through a genome-wide CRISPR-Cas9-mediated forward genetic screen, we identified MORC2 as an essential gene required for epigenetic silencing by the HUSH complex. HUSH recruits MORC2 to target sites in heterochromatin. We exploited a new method, differential viral accessibility (DIVA), to show that loss of MORC2 results in chromatin decompaction at these target loci, which is concomitant with a loss of H3K9me3 deposition and transcriptional derepression. The ATPase activity of MORC2 is critical for HUSH-mediated silencing, and the most common alteration affecting the ATPase domain in CMT patients (p.Arg252Trp) hyperactivates HUSH-mediated repression in neuronal cells. These data define a critical role for MORC2 in epigenetic silencing by the HUSH complex and provide a mechanistic basis underpinning the role of MORC2 mutations in CMT disease.