Gene silencing by chromatin compaction is integral to establishing and maintaining cell fates. Trimethylated histone 3 lysine 9 (H3K9me3)-marked heterochromatin is reduced in embryonic stem cells compared to differentiated cells. However, the establishment and dynamics of closed regions of chromatin at protein-coding genes, in embryologic development, remain elusive. We developed an antibody-independent method to isolate and map compacted heterochromatin from low-cell number samples. We discovered high levels of compacted heterochromatin, H3K9me3-decorated, at protein-coding genes in early, uncommitted cells at the germ-layer stage, undergoing profound rearrangements and reduction upon differentiation, concomitant with cell type-specific gene expression. Perturbation of the three H3K9me3-related methyltransferases revealed a pivotal role for H3K9me3 heterochromatin during lineage commitment at the onset of organogenesis and for lineage fidelity maintenance.