The transcriptional program of early embryonic development is tightly regulated by a set of well-defined transcription factors that suppress premature expression of differentiation genes and sustain the pluripotent identity. It is generally accepted that this program can be perturbed by environmental factors such as chemical pollutants; however, the precise molecular mechanisms remain unknown. The aryl hydrocarbon receptor (AHR) is a widely expressed nuclear receptor that senses environmental stimuli and modulates target gene expression. Here, we have investigated the AHR interactome in embryonic stem cells by mass spectrometry and show that ectopic activation of AHR during early differentiation disrupts the differentiation program via the chromatin remodeling complex NuRD (nucleosome remodeling and deacetylation). The activated AHR/NuRD complex altered the expression of differentiation-specific genes that control the first two developmental decisions without affecting the pluripotency program. These findings identify a mechanism that allows environmental stimuli to disrupt embryonic development through AHR signaling.