In embryonic stem cells (ESCs), developmental gene promoters are characterized by their bivalent chromatin state, with simultaneous modification by MLL2 and Polycomb complexes. Although essential for embryogenesis, bivalency is functionally not well understood. Here, we show that MLL2 plays a central role in ESC genome organization. We generate a catalog of bona fide bivalent genes in ESCs and demonstrate that loss of MLL2 leads to increased Polycomb occupancy. Consequently, promoters lose accessibility, long-range interactions are redistributed, and ESCs fail to differentiate. We pose that bivalency balances accessibility and long-range connectivity of promoters, allowing developmental gene expression to be properly modulated.