Sall4 is a transcription factor essential for early mammalian development. Though it is reported to play an important role in embryonic stem (ES) cell self-renewal, whether it is an essential pluripotency factor has been disputed. Though Sall4 is known to associate with the Nucleosome Remodeling and Deacetylase (NuRD) complex, the nature of this interaction is unclear as NuRD and Sall4 serve opposing functions in ES cells. Here we use defined culture conditions and single-cell gene expression analyses to show that Sall4 prevents activation of the neural gene expression programme in ES cells but is dispensable for maintaining the pluripotency gene regulatory network. We further show using genome-wide analyses that while Sall4 interacts with NuRD, it neither recruits NuRD to chromatin nor influences transcription via NuRD. Rather we propose a model where, by titrating Sall4 protein, NuRD limits the differentiation-inhibiting activity of Sall4 in ES cells to enable lineage commitment.