To better understand the tissue-specific regulation of chromatin state in cell-fate determination and animal development, we defined the tissue-specific expression of all 36 C. elegans presumptive lysine methyltransferase (KMT) genes using single-molecule fluorescence in situ hybridization (smFISH). Most KMTs were expressed in only one or two tissues. The germline was the tissue with the broadest KMT expression. We found that the germline-expressed C. elegans protein SET-17, which has a SET domain similar to that of the PRDM9 and PRDM7 SET-domain proteins, promotes fertility by regulating gene expression in primary spermatocytes. SET-17 drives the transcription of spermatocyte-specific genes from four genomic clusters to promote spermatid development. SET-17 is concentrated in stable chromatin-associated nuclear foci at actively transcribed msp (major sperm protein) gene clusters, which we term msp locus bodies. Our results reveal the function of a PRDM9/7-family SET-domain protein in spermatocyte transcription. We propose that the spatial intranuclear organization of chromatin factors might be a conserved mechanism in tissue-specific control of transcription.