Updated project metadata. Tissue homeostasis and regeneration require activation and subsequent lineage commitment of tissue-resident stem cells (SCs). These state changes are controlled by epigenetic barriers. Using hair follicle stem cells (HFSCs) as paradigm, we studied how aging impacts the chromatin landscape and function of mammalian SCs. Analyses of genome-wide chromatin accessibility revealed that aged HFSCs displayed widespread reduction of chromatin accessibility specifically at key SC self-renewal and differentiation genes that were characterized by bivalent promoters carrying both activating and repressive chromatin marks. Consistently, aged HFSCs showed reduced self-renewing capacity and attenuated ability to activate expression of these bivalent genes upon regeneration. These functional defects were niche-dependent as transplantation of aged HFSCs into young recipients or into ex vivo niches restored SC functions and transcription of poised genes. Mechanistically, aged HFSC niche displayed wide-spread alterations in extracellular matrix composition and mechanics, resulting in compressive forces on SCs and subsequent transcriptional repression, leading to loss of bivalent promoters. Tuning tissue mechanics both in vivo and in vitro recapitulated age-related SC changes, implicating niche mechanics as a central regulator of genome organization and function leading to age-dependent SC exhaustion.