The histone H2A variant H2A.Z is essential for embryonic development and for proper control of developmental gene expression programs in embryonic stem cells (ESCs). Divergent regions of amino acid sequence of H2A.Z likely determine its functional specialization compared to core histone H2A. For example, H2A.Z contains three divergent residues in the essential C-terminal acidic patch that reside on the surface of the histone octamer as an uninterrupted acidic patch domain; however, we know little about how these residues contribute to chromatin structure and function. Here, we show that the divergent amino acids Gly92, Asp97, and Ser98 in the H2A.Z C-terminal acidic patch (H2A.Z(AP3)) are critical for lineage commitment during ESC differentiation. H2A.Z is enriched at most H3K4me3 promoters in ESCs including poised, bivalent promoters that harbor both activating and repressive marks, H3K4me3 and H3K27me3 respectively. We found that while H2A.Z(AP3) interacted with its deposition complex and displayed a highly similar distribution pattern compared to wild-type H2A.Z, its enrichment levels were reduced at target promoters. Further analysis revealed that H2A.Z(AP3) was less tightly associated with chromatin, suggesting that the mutant is more dynamic. Notably, bivalent genes in H2A.Z(AP3) ESCs displayed significant changes in expression compared to active genes. Moreover, bivalent genes in H2A.Z(AP3) ESCs gained H3.3, a variant associated with higher nucleosome turnover, compared to wild-type H2A.Z. We next performed single cell imaging to measure H2A.Z dynamics. We found that H2A.Z(AP3) displayed higher mobility in chromatin compared to wild-type H2A.Z by fluorescent recovery after photobleaching (FRAP). Moreover, ESCs treated with the transcriptional inhibitor flavopiridol resulted in a decrease in the H2A.Z(AP3) mobile fraction and an increase in its occupancy at target genes indicating that the mutant can be properly incorporated into chromatin. Collectively, our work suggests that the divergent residues in the H2A.Z acidic patch comprise a unique domain that couples control of chromatin dynamics to the regulation of developmental gene expression patterns during lineage commitment.