BACKGROUND: The ability to deposit histone H3K27-trimethyl (me3) marks is essential for transcriptional repression by Polycomb Repressive Complex 2 (PRC2). This is largely attributed to Polycomb repressive complex 1 (PRC1), whose recruitment is H3K27me3-dependent. Yet it is unclear how H3K27me3 contributes to transcription regulation independently of PRC1. RESULTS: To address this question, we identified H3K27me3-binding proteins in the unicellular eukaryote Paramecium where PRC2 targets transposable elements (TEs) and PRC1 is absent. We show that the chromodomain protein Firefly is a H3K27me3 reader in vitro and accumulates onto TEs in a H3K27me3-dependent manner. We also identify Firefly interactors: Sleepy, a coiled-coil containing protein and TfIIs4, a transcription elongation factor. We show that Firefly, Sleepy and TfIIs4 are jointly required in vivo for correct H3K27me3 accumulation and nascent transcription at TEs. CONCLUSIONS: This positive feedback loop to enrich H3K27me3 at TEs is analogous to self-reinforcing loops leading to H3K9 methylation at repeats in fungi, plants and animals. Our work reveals a unique association between H3K27me3 readers and active transcription.