Bradyzoite differentiation is marked by major changes in gene expression resulting in a parasite that expresses a new repertoire of surface antigens hidden inside a modified parasitophorous vacuole called the tissue cyst. The factors that control this important life cycle transition are not well understood. Here we describe an important Toxoplasma repressor mechanism controlling bradyzoite differentiation that operates exclusively in the tachyzoite stage. The ApiAP2 factor, AP2IV-4, is a nuclear factor dynamically expressed in late S phase through mitosis/cytokinesis of the tachyzoite cell cycle and absent from the bradyzoite. Remarkably, deletion of the AP2IV-4 locus resulted in the increased expression of bradyzoite mRNAs in replicating tachyzoites and in two different genetic lineages, we confirmed the misexpression of tissue cyst wall components (e.g. BPK1, MCP4, CST1) and the bradyzoite surface antigen SRS9 in the tachyzoite stage. In the murine animal model, the loss of AP2IV-4 had profound biological consequences. Prugniaud strain parasites lacking AP2IV-4 were unable to form tissue cysts in brain tissue and the absence of this factor also recruited a potent immune response characterized by increases inflammatory monocytes, IFN-γ and higher numbers of both CD8+ and CD4+ T-cells. Altogether these results indicate that suppression of bradyzoite antigens by AP2IV-4 during acute infection is required for Toxoplasma to establish a chronic infection in the immune-competent host.