Transposable elements (TEs) compose about 40% of the murine genome. Retrotransposition of active TEs such as LINE-1 (L1) tremendously impacts genetic diversification and genome stability. Therefore, transcription and transposition activities of retrotransposons are tightly controlled. Here, we show that the Krüppel-like zinc finger protein Zfp281 directly binds and suppresses a subset of retrotransposons, including the active young L1 repeat elements, in mouse embryonic stem (ES) cells. In addition, we find that Zfp281-regulated L1s are highly enriched for 5-hydroxymethylcytosine (5hmC) and H3K4me3. The COMPASS-like H3K4 methyltransferase Mll2 is the major H3K4me3 methylase at the Zfp281-regulated L1s and required for their proper expression. Our studies also reveal that Zfp281 functions partially through recruiting the L1 regulators DNA hydroxymethylase Tet1 and Sin3A, and restricting Mll2 at these active L1s, leading to their balanced expression. In summary, our data indicate an instrumental role of Zfp281 in suppressing the young active L1s in mouse ES cells.