Initiation of X inactivation depends on the coordinated expression of the sense/antisense pair Xist/Tsix. We show here that a precisely defined Xist promoter region flanked by CTCF is maintained by Tsix in a heterochromatic-like state in undifferentiated embryonic stem (ES) cells and shifts to a pseudoeuchromatic structure upon Tsix truncation. We further demonstrate that the epigenetic state of the Xist 5' region prior to differentiation predicts the efficiency of transcriptional machinery recruitment to the Xist promoter during differentiation. Our results provide mechanistic insights into the Tsix-mediated epigenetic regulation of Xist resulting in Xist promoter activation and initiation of X inactivation in differentiating ES cells.