Histone methylation is an important epigenetic phenomenon that participates in a diverse array of cellular processes and has been found to be associated with cancer. Recent identification of several histone demethylases has proved that histone methylation is a reversible process. Through a candidate approach, we have biochemically identified JMJD3 as an H3K27 demethylase. Transfection of JMJD3 into HeLa cells caused a specific reduction of trimethyl H3K27, but had no effect on di- and monomethyl H3K27, or histone lysine methylations on H3K4 and H3K9. The enzymatic activity requires the JmjC domain and the conserved histidine that has been suggested to be important for a cofactor binding. In vitro biochemical experiments demonstrated that JMJD3 directly catalyzes the demethylation. In addition, we found that JMJD3 is upregulated in prostate cancer, and its expression is higher in metastatic prostate cancer. Thus, we identified JMJD3 as a demethylase capable of removing the trimethyl group from histone H3 lysine 27 and upregulated in prostate cancer.