The heterochromatin barrier must be overcome to generate induced pluripotent stem cells and cell fusion-mediated reprogrammed hybrids. Here, we show that the absence of T-cell factor 3 (Tcf3), a repressor of β-catenin target genes, strikingly and rapidly enhances the efficiency of neural precursor cell (NPC) reprogramming. Remarkably, Tcf3(-/-) ES cells showed a genome-wide increase in AcH3 and decrease in H3K9me3 and can reprogram NPCs after fusion greatly. In addition, during reprogramming of NPCs into induced pluripotent stem cells, the silencing of Tcf3 increased AcH3 and decreased the number of H3K9me3-positive heterochromatin foci early and long before reactivation of the endogenous stem cell genes. In conclusion, our data suggest that Tcf3 functions as a repressor of the reprogramming potential of somatic cells.