We report locus-specific disintegration of megabase-scale chromosomal conformations in brain after neuronal ablation of Setdb1 (also known as Kmt1e; encodes a histone H3 lysine 9 methyltransferase), including a large topologically associated 1.2-Mb domain conserved in humans and mice that encompasses >70 genes at the clustered protocadherin locus (hereafter referred to as cPcdh). The cPcdh topologically associated domain (TADcPcdh) in neurons from mutant mice showed abnormal accumulation of the transcriptional regulator and three-dimensional (3D) genome organizer CTCF at cryptic binding sites, in conjunction with DNA cytosine hypomethylation, histone hyperacetylation and upregulated expression. Genes encoding stochastically expressed protocadherins were transcribed by increased numbers of cortical neurons, indicating relaxation of single-cell constraint. SETDB1-dependent loop formations bypassed 0.2-1 Mb of linear genome and radiated from the TADcPcdh fringes toward cis-regulatory sequences within the cPcdh locus, counterbalanced shorter-range facilitative promoter-enhancer contacts and carried loop-bound polymorphisms that were associated with genetic risk for schizophrenia. We show that the SETDB1 repressor complex, which involves multiple KRAB zinc finger proteins, shields neuronal genomes from excess CTCF binding and is critically required for structural maintenance of TADcPcdh.