Nucleotide excision repair factors, initially characterized as part of DNA repair, have been shown to participate in the transcriptional process in the absence of genotoxic attack. However, their molecular function when recruited at the promoters of activated genes together with the transcription machinery remained obscure. Here we show that the NER factors XPG and XPF are essential for establishing CTCF-dependent chromatin looping between the promoter and terminator of the activated RARβ2 gene. Silencing XPG and/or XPF endonucleases, or mutations in their catalytic sites, prevents CTCF recruitment, chromatin loop formation, and optimal transcription of RARβ2. We demonstrated that XPG endonuclease promotes DNA breaks and DNA demethylation at promoters allowing the recruitment of CTCF and gene looping, which is further stabilized by XPF. Our results highlight a timely orchestrated activity of the NER factors XPG and XPF in the formation of the active chromatin hub that controls gene expression.