Diffuse midline glioma (DMG) is a fatal childhood brain tumour characterised primarily by mutant histone H3 (H3K27M). H3K27M causes a global reduction in Polycomb Repressive Complex 2 (PRC2)-mediated H3K27me3 by inhibiting the enzymatic activity of the complex. Paradoxically, PRC2 is essential in DMG tumour cells where residual complex activity is required for oncogenic gene repression, though the molecular mechanisms downstream of PRC2 in this context are poorly understood. Here, we found this oncogenic gene repression is mediated by specific canonical PRC1 (cPRC1) formations. By combining CRISPR screening, biochemical and chromatin mapping approaches with functional perturbations we show that cPRC1 complexes containing CBX4 and PCGF4 are co-opted to drive repression downstream of H3K27me3 in DMG cells. Remarkably, the altered H3K27me3 landscape characteristic of these tumours rewires the distribution of distinct cPRC1 complexes which read this modification on chromatin. In H3K27M-mutant DMG, CBX4 and PCGF4 containing cPRC1 accumulate at sites of H3K27me3 while other cPRC1 formations are displaced. Despite accounting for a minority of the heterogenous cPRC1 complexes in DMG, CBX4/PCGF4-containing complexes are important gene repressors in this setting. Our findings link the altered distribution of H3K27me3 with imbalanced cPRC1 function, promoting oncogenic gene repression in DMG cells, revealing new disease mechanisms and highlighting potential therapeutic opportunities in this incurable childhood brain tumour.