Kinetoplastids are a highly divergent lineage of eukaryotes with unusual mechanisms for regulating gene expression. We previously surveyed 65 putative chromatin factors in the kinetoplastid Trypanosoma brucei. Our analyses revealed that the predicted histone methyltransferase SET27 and the Chromodomain protein CRD1 are tightly concentrated at RNAPII transcription start regions (TSRs). Here we report that SET27 and CRD1, together with four previously uncharacterized constituents, form the SET27 promoter-associated regulatory complex (SPARC), which is specifically enriched at TSRs. SET27 loss leads to aberrant RNAPII recruitment to promoter sites, accumulation of polyadenylated transcripts upstream of normal transcription start sites, and conversion of some normally unidirectional promoters to bidirectional promoters. Transcriptome analysis in the absence of SET27 revealed upregulated mRNA expression in the vicinity of SPARC peaks within the main body of chromosomes in addition to derepression of genes encoding variant surface glycoproteins (VSGs) located in subtelomeric regions. These analyses uncover a novel chromatin-associated complex required to establish accurate promoter position and directionality.