The genetic compensation response (GCR) has recently been proposed as a possible explanation for the phenotypic discrepancies between gene-knockout and gene-knockdown1,2; however, the underlying molecular mechanism of the GCR remains uncharacterized. Here, using zebrafish knockdown and knockout models of the capn3a and nid1a genes, we show that mRNA bearing a premature termination codon (PTC) promptly triggers a GCR that involves Upf3a and components of the COMPASS complex. Unlike capn3a-knockdown embryos, which have small livers, and nid1a-knockdown embryos, which have short body lengths2, capn3a-null and nid1a-null mutants appear normal. These phenotypic differences have been attributed to the upregulation of other genes in the same families. By analysing six uniquely designed transgenes, we demonstrate that the GCR is dependent on both the presence of a PTC and the nucleotide sequence of the transgene mRNA, which is homologous to the compensatory endogenous genes. We show that upf3a (a member of the nonsense-mediated mRNA decay pathway) and components of the COMPASS complex including wdr5 function in GCR. Furthermore, we demonstrate that the GCR is accompanied by an enhancement of histone H3 Lys4 trimethylation (H3K4me3) at the transcription start site regions of the compensatory genes. These findings provide a potential mechanistic basis for the GCR, and may help lead to the development of therapeutic strategies that treat missense mutations associated with genetic disorders by either creating a PTC in the mutated gene or introducing a transgene containing a PTC to trigger a GCR.