Polycomb repressive complex 2 (PRC2) catalyzes histone H3K27 trimethylation (H3K27me3), a hallmark of gene silencing. Here we report the crystal structures of an active PRC2 complex of 170 kilodaltons from the yeast Chaetomium thermophilum in both basal and stimulated states, which contain Ezh2, Eed, and the VEFS domain of Suz12 and are bound to a cancer-associated inhibiting H3K27M peptide and a S-adenosyl-l-homocysteine cofactor. The stimulated complex also contains an additional stimulating H3K27me3 peptide. Eed is engulfed by a belt-like structure of Ezh2, and Suz12(VEFS) contacts both of these two subunits to confer an unusual split active SET domain for catalysis. Comparison of PRC2 in the basal and stimulated states reveals a mobile Ezh2 motif that responds to stimulation to allosterically regulate the active site.