Drosophila imaginal disc cells exhibit a remarkable ability to convert cell fates in response to various perturbations, a phenomenon called transdetermination (TD). We previously identified winged eye (wge) as a factor that induces eye-to-wing TD upon overexpression in eye imaginal discs, but the molecular mechanisms underlying TD have remained largely unclear. Here, we found that wge induces various histone modifications and enhances the methylation of Lys9 on histone H3 (H3K9), a feature of heterochromatin. A histone methyltransferase, Su(var)3-9, is required for wge-mediated H3K9 methylation and eye-to-wing TD. Su(var)3-9 is also required for classical wound-induced TD but not for normal development, suggesting its involvement in several types of imaginal disc TDs. Transcriptome analysis revealed that wge represses eye identity genes independently of Su(var)3-9 and activates TD-related genes by acting together with Su(var)3-9. These findings provide new insights into diverse types of chromatin regulation at progressive steps of cell-fate conversions. Drosophila imaginal discs switch disc identity by a process known as transdetermination. Masuko et al. demonstrate that expression of the winged eye gene induces transdetermination through histone modifications such as H3K9-methylation. winged eye regulates expression of transdetermination-related genes via a histone methyltransferase, Su(var)3-9.