PR-Set7/SET8 is a histone H4-lysine 20 methyltransferase required for normal cell proliferation. However, the exact functions of this enzyme remain to be determined. In this study, we show that human PR-Set7 functions during S phase to regulate cellular proliferation. PR-Set7 associates with replication foci and maintains the bulk of H4-K20 mono- and trimethylation. Consistent with a function in chromosome dynamics during S phase, inhibition of PR-Set7 methyltransferase activity by small hairpin RNA causes a replicative stress characterized by alterations in replication fork velocity and origin firing. This stress is accompanied by massive induction of DNA strand breaks followed by a robust DNA damage response. The DNA damage response includes the activation of ataxia telangiectasia mutated and ataxia telangiectasia related kinase-mediated pathways, which, in turn, leads to p53-mediated growth arrest to avoid aberrant chromosome behavior after improper DNA replication. Collectively, these data indicate that PR-Set7-dependent lysine methylation during S phase is an essential posttranslational mechanism that ensures genome replication and stability.