The LSD1-CoREST histone demethylase complex is required to repress neuronal genes in nonneuronal tissues. Here we show that sumoylation of Braf35, one of the subunits of the complex, is required to maintain full repression of neuron-specific genes and for occupancy of the LSD1-CoREST complex at its gene targets. Interestingly, expression of Braf35 was sufficient to prevent neuronal differentiation induced by bHLH neurogenic transcription factors in P19 cells and in neuronal progenitors of the chicken embryo neural tube. Sumoylation of Braf35 is required for this antineurogenic activity. We also show that iBraf, a paralogue of Braf35, forms heterodimers with Braf35. Braf35-iBraf heterodimerization impairs Braf35 interaction with the LSD1-CoREST complex and inhibits Braf35 sumoylation. Consistent with these results, iBraf prevents the antineurogenic activity of Braf35 in vivo. Our data uncover a mechanism of regulation of the LSD1-CoREST complex and provide a molecular explanation for the antagonism between Braf35 and iBraf in neuronal differentiation.