Nucleosomes play important structural and regulatory roles by tightly wrapping the DNA that constitutes the metazoan genome. The Polycomb group (PcG) proteins modulate nucleosomes to maintain repression of key developmental genes, including Hox genes whose temporal and spatial expression is tightly regulated to guide patterning of the anterior-posterior body axis. CBX2, a component of the mammalian Polycomb repressive complex 1 (PRC1), contains a compaction region that has the biochemically defined activity of bridging adjacent nucleosomes. Here, we demonstrate that a functional compaction region is necessary for proper body patterning, because mutating this region leads to homeotic transformations similar to those observed with PcG loss-of-function mutations. We propose that CBX2-driven nucleosome compaction is a key mechanism by which PcG proteins maintain gene silencing during mouse development.