Lysine-specific demethylase 1 (LSD1), which demethylates mono- and dimethylated histone H3-Lys4 as part of a complex including CoREST and histone deacetylases (HDACs), is essential for embryonic development in the mouse beyond embryonic day 6.5 (e6.5). To determine the role of LSD1 during this early period of embryogenesis, we have generated loss-of-function gene trap mice and conditional knockout embryonic stem (ES) cells. Analysis of postimplantation gene trap embryos revealed that LSD1 expression, and therefore function, is restricted to the epiblast. Conditional deletion of LSD1 in mouse ES cells, the in vitro counterpart of the epiblast, revealed a reduction in CoREST protein and associated HDAC activity, resulting in a global increase in histone H3-Lys56 acetylation, but not H3-Lys4 methylation. Despite this biochemical perturbation, ES cells with LSD1 deleted proliferate normally and retain stem cell characteristics. Loss of LSD1 causes the aberrant expression of 588 genes, including those coding for transcription factors with roles in anterior/posterior patterning and limb development, such as brachyury, Hoxb7, Hoxd8, and retinoic acid receptor γ (RARγ). The gene coding for brachyury, a key regulator of mesodermal differentiation, is a direct target gene of LSD1 and is overexpressed in e6.5 Lsd1 gene trap embryos. Thus, LSD1 regulates the expression and appropriate timing of key developmental regulators, as part of the LSD1/CoREST/HDAC complex, during early embryonic development.