FSHD is an autosomal dominant disease associated with contraction of D4Z4 repeats, mapping to 4q35. By an unknown mechanism, D4Z4 deletion causes an epigenetic switch leading to de-repression of 4q35 genes. Repression by D4Z4 displays similarities with Polycomb-mediated silencing. Polycomb (PcG) and Trithorax (TrxG) group proteins work as counteractors in the epigenetic regulation of gene expression. Transcription of PcG-binding regions can regulate PcG activity. Intriguingly, it is shown here that D4Z4 generates a chromatin-bound RNA selectively in FSHD patients and upon 4q35 de-repression. This transcript is specifically 4q35-associated and is required for 4q35 gene de-repression. Interestingly, the identified RNA promotes the recruitment of the TrxG protein Ash1L to the FSHD locus. Notably, Ash1L is necessary for 4q35 gene de-repression. These results suggest that the RNA functions by recruiting Ash1L to counteract PcG silencing at D4Z4 leading to 4q35 gene de-repression in FSHD. This work provides a nexus for revealing the epigenetic basis of FSHD etiology. Moreover, this study gives insights into the biological function of repetitive elements.