The enhancer landscape of pluripotent stem cells undergoes extensive reorganization during early mammalian development. The functions and mechanisms behind such reorganization, however, are unclear. Here, we show that the transcription factor GRHL2 is necessary and sufficient to activate an epithelial subset of enhancers as naive embryonic stem cells (ESCs) transition into formative epiblast-like cells (EpiLCs). Surprisingly, many GRHL2 target genes do not change in expression during the ESC-EpiLC transition. Instead, enhancers regulating these genes in ESCs diminish in activity in EpiLCs while GRHL2-dependent alternative enhancers become activated to maintain transcription. GRHL2 therefore assumes control over a subset of the naive network via enhancer switching to maintain expression of epithelial genes upon exit from naive pluripotency. These data evoke a model where the naive pluripotency network becomes partitioned into smaller, independent networks regulated by EpiLC-specific transcription factors, thereby priming cells for lineage specification.

SUMMARY Early development is governed by the ability of pluripotent cells to retain the full range of developmental potential and respond accurately to developmental cues. This property is achieved in large part by the temporal and contextual regulation of gene expression by enhancers. Here, we evaluated regulation of enhancer activity during differentiation of embryonic stem to epiblast cells and uncovered the forkhead transcription factor FOXD3 as a major regulator of the developmental potential of both pluripo-tent states. FOXD3 bound to distinct sites in the two cell types priming enhancers through a dual-functional mechanism. It recruited the SWI/SNF chromatin remodeling complex ATPase BRG1 to promote nucleosome removal while concurrently inhibiting maximal activation of the same enhancers by recruiting histone deacetylases1/2. Thus, FOXD3 prepares cognate genes for future maximal expression by establishing and simultaneously repressing enhancer activity. Through switching of target sites, FOXD3 modulates the developmental potential of pluripotent cells as they differentiate.

Complex gene regulatory networks ensure that important genes are expressed at precise levels. When gene expression is sufficiently perturbed it can lead to disease. To understand how gene expression disruptions percolate through a network, we must first map connections between regulatory genes and .