Genome stability relies on epigenetic mechanisms that enforce repression of endogenous retroviruses (ERVs). Current evidence suggests that distinct chromatin-based mechanisms repress ERVs in cells of embryonic origin (histone methylation dominant) vs. more differentiated cells (DNA methylation dominant). However, the latter aspect of this model has not been tested. Remarkably, and in contrast to the prevailing model, we find that repressive histone methylation catalyzed by the enzyme SETDB1 is critical for suppression of specific ERV families and exogenous retroviruses in committed B-lineage cells from adult mice. The profile of ERV activation in SETDB1-deficient B cells is distinct from that observed in corresponding embryonic tissues, despite the loss of repressive chromatin modifications at all ERVs. We provide evidence that, on loss of SETDB1, ERVs are activated in a lineage-specific manner depending on the set of transcription factors available to target proviral regulatory elements. These findings have important implications for genome stability in somatic cells, as well as the interface between epigenetic repression and viral latency.