SET domain bifurcated histone methyltransferase 1 (SETDB1) is a histone H3 lysine 9 (H3K9) methyltransferase, functioning in transcriptional silencing of the transposable elements (TEs), endogenous retroviruses (ERVs), interferon-stimulated genes (ISGs), and immune cell-related molecules. SETDB1 collaborates with cofactors such as ATF7IP and TRIM28 and functions in concert with DNA methylation to maintain gene repression in both stem cells and differentiated somatic cells. Given its gene targets, recent studies have shown that SETDB1 is a critical immune checkpoint gene in both solid and hematological tumors. In this review, we first discuss the role of SETDB1 in gene regulation through its histone methyltransferase activity, including an overview of its structural features and key cofactors. We then highlight the lineage-specific roles of SETDB1 in both normal hematopoietic processes and hematological malignancies, emphasizing its function as an immune checkpoint molecule that suppresses natural killer (NK) cell-mediated antileukemia responses.