An open and decondensed chromatin organization is a defining property of pluripotency. Several epigenetic regulators have been implicated in maintaining an open chromatin organization, but how these processes are connected to the pluripotency network is unknown. Here, we identified a new role for the transcription factor NANOG as a key regulator connecting the pluripotency network with constitutive heterochromatin organization in mouse embryonic stem cells. Deletion of Nanog leads to chromatin compaction and the remodeling of heterochromatin domains. Forced expression of NANOG in epiblast stem cells is sufficient to decompact chromatin. NANOG associates with satellite repeats within heterochromatin domains, contributing to an architecture characterized by highly dispersed chromatin fibers, low levels of H3K9me3, and high major satellite transcription, and the strong transactivation domain of NANOG is required for this organization. The heterochromatin-associated protein SALL1 is a direct cofactor for NANOG, and loss of Sall1 recapitulates the Nanog-null phenotype, but the loss of Sall1 can be circumvented through direct recruitment of the NANOG transactivation domain to major satellites. These results establish a direct connection between the pluripotency network and chromatin organization and emphasize that maintaining an open heterochromatin architecture is a highly regulated process in embryonic stem cells.