The DREAM (DP, Retinoblastoma [Rb]-like, E2F, and MuvB) complex controls cellular quiescence by repressing cell cycle genes, but its mechanism of action is poorly understood. Here we show that Caenorhabditis elegans DREAM targets have an unusual pattern of high gene body HTZ-1/H2A.Z. In mutants of lin-35, the sole p130/Rb-like gene in C. elegans, DREAM targets have reduced gene body HTZ-1/H2A.Z and increased expression. Consistent with a repressive role for gene body H2A.Z, many DREAM targets are up-regulated in htz-1/ H2A.Z mutants. Our results indicate that the DREAM complex facilitates high gene body HTZ-1/H2A.Z, which plays a role in target gene repression.