Enhancer activation is essential for cell-type specific gene expression during cellular differentiation, however, how enhancers transition from a hypoacetylated “primed” state to a hyperacetylated-active state is incompletely understood. Here, we show SET domain-containing 5 (SETD5) forms a complex with NCoR-HDAC3 co-repressor that prevents histone acetylation of enhancers for two master adipogenic regulatory genes Cebpa and Pparg early during adipogenesis. The loss of SETD5 from the complex is followed by enhancer hyperacetylation. SETD5 protein levels were transiently increased and rapidly degraded prior to enhancer activation providing a mechanism for the loss of SETD5 during the transition. We show that induction of the CDC20 co-activator of the ubiquitin ligase leads to APC/C mediated degradation of SETD5 during the transition and this operates as a molecular switch that facilitates adipogenesis.