Histone variant H2A.X is a well-conserved histone that plays crucial roles in mediating DNA damage response across eukaryotes. Although H2A.X expresses and decorates gene bodies of actively expressed genes even without stress, it is not known if H2A.X has functions beyond DNA damage repair. Using genetic, high-throughput genomics, and molecular approaches, we identified a previously unappreciated role of H2A.X in regulating development-associated genes. Using custom-made antibodies specific to the rice H2A.X variant, we show that it repressed the deposition of active H3K4me3 marks over gene bodies and transposable elements (TEs), specifically regulating root development, photosynthesis, and pigmentation-related genes, as seen by the impairment of these processes in rice h2a.x knockout (ko) plants. H2A.X also repressed global deposition of repressive mark H3K9me2 by restricting the activity of H2A variant H2A.W. In agreement with this, there was a genome-wide relocalization of H2A.W to TEs and a few genes in ko plants. H2A.X-overexpressing plants exhibited stress phenotypes, including increased anthocyanin levels, mimicking the transcriptome of DNA-damaged wild-type (WT) plants. The transcriptome of knockdown (kd) lines of facilitates chromatin transcription (FACT) complex, a known chaperone of H2A.X, was largely similar to that of h2a.x ko plants, suggesting that the development-associated functions of FACT are at least partially due to H2A.X. These results suggest a specific role of H2A.X in regulating competing histone marks, a function that might also be conserved across plants.