Chromatin regulators control cellular differentiation by orchestrating dynamic developmental gene expression programs, and hence, malfunctions in the regulation of chromatin state contribute to both developmental disorders and disease state. Mll4 (Kmt2d), a member of the COMPASS (COMplex of Proteins ASsociated with Set1) protein family that implements histone H3 lysine 4 monomethylation (H3K4me1) at enhancers, is essential for embryonic development and functions as a pancancer tumor suppressor. We define the roles of Mll4/COMPASS and its catalytic activity in the maintenance and exit of ground-state pluripotency in murine embryonic stem cells (ESCs). Mll4 is required for ESC to exit the naive pluripotent state; however, its intrinsic catalytic activity is dispensable for this process. The depletion of the H3K4 demethylase Lsd1 (Kdm1a) restores the ability of Mll4 null ESCs to transition from naive to primed pluripotency. Thus, we define an opposing regulatory axis, wherein Lsd1 and associated co-repressors directly repress Mll4-activated gene targets. This finding has broad reaching implications for human developmental syndromes and the treatment of tumors carrying Mll4 mutations.