Placental development relies on coordinated cell fate decisions governed by signalling inputs. However, little is known about how signalling cues are transformed into repressive mechanisms triggering lineage-specific transcriptional signatures. Here, we demonstrate that upon inhibition of the Fgf/Erk pathway in mouse trophoblast stem cells (TSCs), the Ets2 repressor factor (Erf) interacts with the Nuclear Receptor Co-Repressor Complex 1 and 2 (NCoR1/2) and recruits it to key trophoblast genes. Genetic ablation of Erf or Tbl1x (a component of the NCoR1/2 complex) abrogates the Erf/NCoR1/2 interaction. This leads to mis-expression of Erf/NCoR1/2 target genes, resulting in a TSC differentiation defect. Mechanistically, Erf regulates expression of these genes by recruiting the NCoR1/2 complex and decommissioning their H3K27ac-dependent enhancers. Our findings uncover how the Fgf/Erf/NCoR1/2 repressive axis governs cell fate and placental development, providing a paradigm for Fgf-mediated transcriptional control.