Citrullination is the post-translational conversion of an arginine residue within a protein to the non-coded amino acid citrulline. This modification leads to the loss of a positive charge and reduction in hydrogen-bonding ability. It is carried out by a small family of tissue-specific vertebrate enzymes called peptidylarginine deiminases (PADIs) and is associated with the development of diverse pathological states such as autoimmunity, cancer, neurodegenerative disorders, prion diseases and thrombosis. Nevertheless, the physiological functions of citrullination remain ill-defined, although citrullination of core histones has been linked to transcriptional regulation and the DNA damage response. PADI4 (also called PAD4 or PADV), the only PADI with a nuclear localization signal, was previously shown to act in myeloid cells where it mediates profound chromatin decondensation during the innate immune response to infection. Here we show that the expression and enzymatic activity of Padi4 are also induced under conditions of ground-state pluripotency and during reprogramming in mouse. Padi4 is part of the pluripotency transcriptional network, binding to regulatory elements of key stem-cell genes and activating their expression. Its inhibition lowers the percentage of pluripotent cells in the early mouse embryo and significantly reduces reprogramming efficiency. Using an unbiased proteomic approach we identify linker histone H1 variants, which are involved in the generation of compact chromatin, as novel PADI4 substrates. Citrullination of a single arginine residue within the DNA-binding site of H1 results in its displacement from chromatin and global chromatin decondensation. Together, these results uncover a role for citrullination in the regulation of pluripotency and provide new mechanistic insights into how citrullination regulates chromatin compaction.