Nucleotide excision repair (NER) defects are associated with cancer, developmental disorders and neurodegeneration. However, with the exception of cancer, the links between defects in NER and developmental abnormalities are not well understood. Here, we show that the ERCC1-XPF NER endonuclease assembles on active promoters in vivo and facilitates chromatin modifications for transcription during mammalian development. We find that Ercc1(-/-) mice demonstrate striking physiological, metabolic and gene expression parallels with Taf10(-/-) animals carrying a liver-specific transcription factor II D (TFIID) defect in transcription initiation. Promoter occupancy studies combined with expression profiling in the liver and in vitro differentiation cell assays reveal that ERCC1-XPF interacts with TFIID and assembles with POL II and the basal transcription machinery on promoters in vivo. Whereas ERCC1-XPF is required for the initial activation of genes associated with growth, it is dispensable for ongoing transcription. Recruitment of ERCC1-XPF on promoters is accompanied by promoter-proximal DNA demethylation and histone marks associated with active hepatic transcription. Collectively, the data unveil a role of ERCC1/XPF endonuclease in transcription initiation establishing its causal contribution to NER developmental disorders.