Methylation of lysine and arginine residues on histone tails affects chromatin structure and gene transcription. Tri- and dimethylation of lysine 9 on histone H3 (H3K9me3/me2) is required for the binding of the repressive protein HP1 and is associated with heterochromatin formation and transcriptional repression in a variety of species. H3K9me3 has long been regarded as a `permanent' epigenetic mark. In a search for proteins and complexes interacting with H3K9me3, we identified the protein GASC1 (gene amplified in squamous cell carcinoma 1), which belongs to the JMJD2 (jumonji domain containing 2) subfamily of the jumonji family, and is also known as JMJD2C. Here we show that three members of this subfamily of proteins demethylate H3K9me3/me2 in vitro through a hydroxylation reaction requiring iron and α-ketoglutarate as cofactors. Furthermore, we demonstrate that ectopic expression of GASC1 or other JMJD2 members markedly decreases H3K9me3/me2 levels, increases H3K9me1 levels, delocalizes HP1 and reduces heterochromatin in vivo. Previously, GASC1 was found to be amplified in several cell lines derived from oesophageal squamous carcinomas, and in agreement with a contribution of GASC1 to tumour development, inhibition of GASC1 expression decreases cell proliferation. Thus, in addition to identifying GASC1 as a histone trimethyl demethylase, we suggest a model for how this enzyme might be involved in cancer development, and propose it as a target for anti-cancer therapy.