Pathogenic apicomplexan parasites like Toxoplasma and Plasmodium (malaria) have complex life cycles consisting of multiple stages. The ability to differentiate from one stage to another requires dramatic transcriptional changes, yet there is a paucity of transcription factors in these protozoa. In contrast, we show here that Toxoplasma possesses extensive chromatin remodeling machinery that modulates gene expression relevant to differentiation. We find that, as in other eukaryotes, histone acetylation and arginine methylation are marks of gene activation in Toxoplasma. We have identified mediators of these histone modifications, as well as a histone deacetylase (HDAC), and correlate their presence at target promoters in a stage-specific manner. We purified the first HDAC complex from apicomplexans, which contains novel components in addition to others previously reported in eukaryotes. A Toxoplasma orthologue of the arginine methyltransferase CARM1 appears to work in concert with the acetylase TgGCN5, which exhibits an unusual bias for H3 [K18] in vitro. Inhibition of TgCARM1 induces differentiation, showing that the parasite life cycle can be manipulated by interfering with epigenetic machinery. This may lead to new approaches for therapy against protozoal diseases and highlights Toxoplasma as an informative model to study the evolution of epigenetics in eukaryotic cells.