Genomic imprinting regulates parental-specific expression of particular genes and is required for normal mammalian development. How imprinting is established during development is, however, largely unknown. To address this question, we studied the mouse Kcnq1 imprinted cluster at which paternal-specific silencing depends on expression of the noncoding RNA Kcnq1ot1. We show that Kcnq1ot1 is expressed from the zygote stage onward and rapidly associates with chromatin marked by Polycomb group (PcG) proteins and repressive histone modifications, forming a discrete repressive nuclear compartment devoid of RNA polymerase II, a configuration also observed at the Igf2r imprinted cluster. In this compartment, the paternal Kcnq1 cluster exists in a three-dimensionally contracted state. In vivo the PcG proteins Ezh2 and Rnf2 are independently required for genomic contraction and imprinted silencing. We propose that the formation of a parental-specific higher-order chromatin organization renders imprint clusters competent for monoallelic silencing and assign a central role to PcG proteins in this process.