Diabetic patients continue to develop inflammation and vascular complications even after achieving glycemic control. This poorly understood “metabolic memory” phenomenon poses major challenges in treating diabetes. Recent studies demonstrate a link between epigenetic changes such as chromatin histone lysine methylation and gene expression. We hypothesized that H3 lysine-9 tri-methylation (H3K9me3), a key repressive and relatively stable epigenetic chromatin mark, may be involved in metabolic memory. This was tested in vascular smooth muscle cells (VSMC) derived from type 2 diabetic db/db mice. These cells exhibit a persistent atherogenic and inflammatory phenotype even after culture in vitro. ChIP assays showed that H3K9me3 levels were significantly decreased at the promoters of key inflammatory genes in cultured db/db VSMC relative to control db/+ cells. Immunoblotting demonstrated that protein levels of the H3K9me3 methyltransferase Suv39h1 were also reduced in db/db VSMC. Furthermore, db/db VSMC were hypersensitive to TNF-α inflammatory stimulus, which induced dramatic and sustained decreases in promoter H3K9me3 and Suv39h1 occupancy. Recruitment of corepressor HP1α was also reduced under these conditions in db/db cells. Overexpression of SUV39H1 in db/db VSMC reversed this diabetic phenotype. Conversely, gene silencing of SUV39H1 with shRNAs in normal human VSMC (HVSMC) increased inflammatory genes. HVSMC cultured in high glucose also showed increased inflammatory gene expression and decreased H3K9me3 at their promoters. These results demonstrate protective roles for H3K9me3 and Suv39h1 against the preactivated state of diabetic VSMC. Dysregulation of epigenetic histone modifications may be a major underlying mechanism for metabolic memory and sustained proinflammatory phenotype of diabetic cells.