<p><i>Monascus</i> spp. are traditional and industrially important fungi. Nevertheless, they produce mycotoxin citrinin which affects food safety. DNA/RNA methylation is a key epigenetic modification. The α-ketoglutarate-dependent dioxygenases (AlkB) acting as demethylase dynamically regulate methylation status through erasing methyl adducts and play key roles in cellular processes. But little is known about AlkB demethylases in filamentous fungi so far. We previously reported that <i>M. purpureus</i> contains five <i>MpAlkB</i> genes. This study reports the regulatory functions of <i>MpAlkB2</i> in <i>Monascus</i> growth and citrinin biosynthesis. <i>MpAlkB2</i> disruption strain and overexpression strain were generated through homologous recombination strategy. <i>MpAlkB2</i> deletion significantly accelerated growth, increased biomass, promoted sporulation and cleistothecia development, and strongly suppressed citrinin biosynthesis with an 80% reduction during the late growth stage. <i>MpAlkB2</i> overexpression slightly inhibited the growth and development, but noticeably increased the yield of citrinin by 2.1 to 3.4 times. The downregulation and upregulation of the global regulator gene <i>LaeA</i>, and citrinin biosynthesis gene cluster genes (<i>pksCT</i>, <i>ctnA</i>, <i>ctnB</i>, and <i>ctnR</i>) caused by <i>MpAlkB2</i> deletion and overexpression respectively supported the pleiotropic trait changes in corresponding engineered strains. These results demonstrated that MpAlkB2 negatively regulates the growth and development, and positively regulates citrinin biosynthesis in <i>M. purpureus</i>. Additionally, <i>MpAlkB2</i> disruption or overexpression slightly affected the production of <i>Monascus</i> pigments. The data support the hypothesis that methylation epigenetics is a control point of <i>Monascus</i> growth and citrinin biosynthesis, and open new leads for molecular breeding to improve industrial fermentation and reduce citrinin.</p>