Embryonic stem cells (ESCs) maintain high genomic plasticity, which is essential for their capacity to enter diverse differentiation pathways. Posttranscriptional modifications of chromatin histones play a pivotal role in maintaining this plasticity. We now report that one such modification, monoubiquitylation of histone H2B on lysine 120 (H2Bub1), catalyzed by the E3 ligase RNF20, increases during ESC differentiation and is required for efficient execution of this process. This increase is particularly important for the transcriptional induction of relatively long genes during ESC differentiation. Furthermore, we identify the deubiquitinase USP44 as a negative regulator of H2B ubiquitylation, whose downregulation during ESC differentiation contributes to the increase in H2Bub1. Our findings suggest that optimal ESC differentiation requires dynamic changes in H2B ubiquitylation patterns, which must occur in a timely and well-coordinated manner.