SETD1A, a lysine-methyltransferase, is a key schizophrenia susceptibility gene. Mice carrying a heterozygous loss-of-function mutation of the orthologous gene exhibit alterations in axonal branching and cortical synaptic dynamics accompanied by working memory deficits. We show that Setd1a binds both promoters and enhancers with a striking overlap between Setd1a and Mef2 on enhancers. Setd1a targets are highly expressed in pyramidal neurons and display a complex pattern of transcriptional up- and downregulations shaped by presumed opposing functions of Setd1a on promoters and Mef2-bound enhancers. Notably, evolutionarily conserved Setd1a targets are associated with neuropsychiatric genetic risk burden. Reinstating Setd1a expression in adulthood rescues cognitive deficits. Finally, we identify LSD1 as a major counteracting demethylase for Setd1a and show that its pharmacological antagonism results in a full rescue of the behavioral and morphological deficits in Setd1a-deficient mice. Our findings advance understanding of how SETD1A mutations predispose to schizophrenia (SCZ) and point to novel therapeutic interventions.