Activation of Myc induces epidermal stem cells to exit their niche and differentiate into sebocytes and interfollicular epidermis, a process that is associated with widespread changes in gene transcription. We have identified chromatin modifications that are characteristic of epidermal stem cells and investigated the effects of Myc activation. Quiescent stem cells in the interfollicular epidermis and the hair follicle bulge had high levels of tri-methylated histone H3 at lysine 9 and H4 at lysine 20. Chromatin in both stem cell populations was hypoacteylated at histone H4 and lacked mono-methylation of histone H4 at lysine 20. Myc-induced exit from the stem cell niche correlated with increased acetylation at histone H4 and transiently increased mono-methylation at lysine 20. The latter was replaced by epigenetic modifications that are largely associated with chromatin silencing: di-methylation at histone H3 lysine 9 and histone H4 lysine 20. These modifications correlated with changes in the specific histone methyltransferases Set8 and Ash-1. The Myc-induced switch from mono- to di-methylated H4K20 required HDAC activity and was blocked by the HDAC inhibitor trichostatin A (TSA). TSA treatment induced a similar epidermal phenotype to activation of Myc, and activation of Myc in the presence of TSA resulted in massive stimulation of terminal differentiation. We conclude that Myc-induced chromatin modifications play a major role in Myc-induced exit from the stem cell compartment.