The chromatin environment is essential for the correct specification and preservation of cell identity through modulation and maintenance of transcription patterns. Many chromatin regulators are required for development, stem cell maintenance, and differentiation. Here, we review the roles of the polycomb repressive complexes, PRC1 and PRC2, and the HDAC1- and HDAC2-containing complexes, NuRD, Sin3, and CoREST, in stem cells, development, and cancer, as well as the ongoing efforts to develop therapies targeting these complexes in human cancer. Furthermore, we discuss the role of repressive complexes in modulating thresholds for gene activation and their importance for specification and maintenance of cell fate.