OCT4 and SOX2 confer pluripotency by recruiting coactivators to activate stem cell–specific transcription. However, the composition of coactivator complexes and their roles in maintaining stem cell fidelity remain unclear. Here, we report the ATP-binding cassette subfamily F member 1 (ABCF1) as a coactivator for OCT4/SOX2 critical for stem cell self-renewal. The intrinsically disordered low-complexity domain (LCD) of ABCF1 contributes to phase separation in vitro and transcriptional activation of pluripotency genes by mediating multivalent interactions with SOX2 and co-dependent coactivators XPC and DKC1. These LCD-driven transcription factor–coactivator interactions critical for pluripotency gene expression are disrupted by DNA damage, likely due to LCD-dependent binding of ABCF1 to damage-generated intracellular DNA fragments instead of SOX2. This study identifies a transcriptional coactivator that uses its LCD to form selective multivalent interactions to regulate stem cell self-renewal and exit from pluripotency when genome integrity is compromised.