In eukaryotes, methylation of histone H3 at lysine 4 (H3K4me) catalyzed by the complex of proteins associated with Set1 (COMPASS) is crucial for the transcriptional regulation of genes and the development of organisms. In Monascus, the functions of COMPASS in establishing H3K4me remain unclear. This study first identified the conserved COMPASS core subunits MpSet1 and MpSwd3 in Monascus purpureus and confirmed their roles in establishing H3K4me2/3. Loss of MpSet1 and MpSwd3 resulted in slower growth and development and inhibited the formation of cleistothecia, ascospores, and conidia. The loss of these core subunits also decreased the production of extracellular and intracellular Monascus pigments (MPs) by 94.2%, 93.5%, 82.7%, and 82.5%, respectively. In addition, RNA high‐throughput sequencing and quantitative real‐time polymerase chain reaction (qRT‐PCR) showed that the loss of MpSet1 and MpSwd3 altered the expression of 2646 and 2659 genes, respectively, and repressed the transcription of MPs synthesis‐related genes. In addition, the ΔMpset1 and ΔMpswd3 strains demonstrated increased sensitivity to cell wall stress with the downregulation of chitin synthase‐coding genes. These results indicated that the COMPASS core subunits MpSet1 and MpSwd3 help establish H3K4me2/3 for growth and development, spore formation, and pigment synthesis in Monascus. These core subunits also assist in maintaining cell wall integrity.