The nucleosome remodeling and deacetylase (NuRD) complex plays an important role in gene expression regulation, stem cell self-renewal, and lineage commitment. However, little is known about the dynamics of NuRD during cellular differentiation. Here, we study these dynamics using genome-wide profiling and quantitative interaction proteomics in mouse embryonic stem cells (ESCs) and neural progenitor cells (NPCs). We find that the genomic targets of NuRD are highly dynamic during differentiation, with most binding occurring at cell-type specific promoters and enhancers. We identify ZFP296 as an ESC-specific NuRD interactor that also interacts with the SIN3A complex. ChIP-sequencing in Zfp296 knockout (KO) ESCs reveals decreased NuRD binding both genome-wide and at ZFP296 binding sites, although this has little effect on the transcriptome. Nevertheless, Zfp296 KO ESCs exhibit delayed induction of lineage-specific markers upon differentiation to embryoid bodies. In summary, we identify an ESC-specific NuRD-interacting protein which regulates genome-wide NuRD binding and cellular differentiation.