The Argonaute proteins (AGO) are well-known for their essential role in post-transcriptional gene silencing in the microRNA (miRNA) pathway. Only two AGOs are expressed in mouse embryonic stem cells (mESCs). The transcriptome of Ago mutant mESCs revealed a large and specific set of differentially expressed genes (DEGs), compared to other miRNA biogenesis factor mutant cells, suggesting additional functions for AGOs. Integration of Ago DEGs with ENCODE histone modification data of WT mESCs revealed a correlation with H3K27me3 chromatin mark. We validated experimentally this result and observed a global loss of H3K27me3, which was only partially explaining the DEGs observed in Ago mutant cells. By integrating chromatin accessibility data in conjunction with the prediction of transcription factor (TF) binding sites, we identified differential binding for five TFs, including KLF4 as a key modulator of more than half of the specific DEGs in the absence of AGO proteins. Our findings illustrate that in addition to chromatin state, information about transcription factor binding is more revelatory in understanding the multi-layered mechanism adopted by cells to regulate gene expression.