The early mammalian embryo utilizes histone H3 lysine 27 trimethylation (H3K27me3) to maintain essential developmental genes in a repressive chromatin state. As differentiation progresses, H3K27me3 is removed in a distinct fashion to activate lineage specific patterns of developmental gene expression. These rapid changes in early embryonic chromatin environment are thought to be dependent on H3K27 demethylases. We have taken a mouse genetics approach to remove activity of both H3K27 demethylases of the Kdm6 gene family, Utx (Kdm6a, X-linked gene) and Jmjd3 (Kdm6b, autosomal gene). Male embryos null for active H3K27 demethylation by the Kdm6 gene family survive to term. At mid-gestation, embryos demonstrate proper patterning and activation of Hox genes. These male embryos retain the Y-chromosome UTX homolog, UTY, which cannot demethylate H3K27me3 due to mutations in catalytic site of the Jumonji-C domain. Embryonic stem (ES) cells lacking all enzymatic KDM6 demethylation exhibit a typical decrease in global H3K27me3 levels with differentiation. Retinoic acid differentiations of these ES cells demonstrate loss of H3K27me3 and gain of H3K4me3 to Hox promoters and other transcription factors, and induce expression similar to control cells. A small subset of genes exhibit decreased expression associated with reduction of promoter H3K4me3 and some low-level accumulation of H3K27me3. Finally, Utx and Jmjd3 mutant mouse embryonic fibroblasts (MEFs) demonstrate dramatic loss of H3K27me3 from promoters of several Hox genes and transcription factors. Our results indicate that early embryonic H3K27me3 repression can be alleviated in the absence of active demethylation by the Kdm6 gene family.