The epigenetic mechanisms that connect hormone signaling to chromatin remain largely unknown. Here we show that LSD1/KDM1A is a critical glucocorticoid receptor (GR) coactivator and report a previously unexplored mechanism where LSD1 activates gene transcription through H3K4me2 demethylation. We demonstrate that direct interaction of GR with LSD1 primarily inhibit its activity against H3K4me1 in vitro. While this interaction enables GR to recruit LSD1 in vivo and allows loss of H3K4me2, it impedes further demethylation. Thus resulting in conversion of H3K4me2 to H3K4me1 at enhancers and promotes H3K27 acetylation and gene activation. We also find that H3K4me2 is an early enhancer mark predicting GR and LSD1 recruitment. These findings differ from the reported mechanism for ER and AR-mediated gene activation, providing a novel mechanism for LSD1 coactivator function as well as shed light on the role of H3K4me2 and enhancers in hormone-mediated gene regulation. In addition we present evidence supporting never before characterized H3K79me3 demethylase activity by members of the JMJD2 family of proteins.