SETDB1, a histone H3K9 methyltransferase, has been reported to be upregulated in a variety of tumors and promotes cancer development. However, the exact pathogenesis of SETDB1 in human colorectal cancer (CRC) is hitherto unknown. Here, we showed that SETDB1 expression was highly amplified in CRC. Functionally, SETDB1 downregulation in SW480 and HCT116 cells reduced cell proliferation, migration, invasion, and increased CRC cells apoptosis. In contrast, SETDB1 overexpression promoted CRC cells proliferation, migration, and invasion. High expression of SETDB1 was associated with a more aggressive phenotype in vitro. Flow cytometry showed that cell cycle was arrested in G1 phase after SETDB1 silencing. Furthermore, depletion of SETDB1 in vivo suppressed CRC cells proliferation. Mechanistically, p21 was identified as the target of SETDB1. After transfected with siSETDB1, expression of p21 was distinctly increased. In contrast, expression of p21 was significantly decreased after overexpression SETDB1. We also showed that SETDB1 could be involved in the regulation of epithelial-mesenchymal transition (EMT) in HCT116 cells. Moreover, we confirmed that SETDB1 could regulate the activity of p21 promoter by dual-luciferase repoter assay, and proved that SETDB1 could bind to the promoter of p21 and regulate its H3K9me3 enrichment level by ChIP-PCR experiment. Finally, we verified that silencing of SETDB1 inhibited CRC tumorigenesis in vivo. In conclusion, our results indicate that SETDB1 is a major driver of CRC development and might provide a new therapeutic target for the clinical treatment of CRC.