Sall4 is an essential transcription factor for early mammalian development and is frequently overexpressed in cancer. Though it is reported to play an important role in embryonic stem cell self-renewal, whether it is an essential pluripotency factor has been disputed. Here we show that Sall4 is dispensable for ES cell pluripotency. Sall4 is an enhancer-binding protein that prevents precocious activation of the neural gene expression programme in ES cells but is not required for maintenance of the pluripotency gene regulatory network. While a proportion of Sall4 protein physically associates with the Nucleosome Remodelling and Deacetylase (NuRD) complex, Sall4 neither recruits NuRD to chromatin nor influences transcription via NuRD; rather free Sall4 protein regulates transcription independently of NuRD. We propose a model whereby enhancer binding by Sall4 and other pluripotency-associated transcription factors is responsible for maintaining the balance between transcriptional programmes in pluripotent cells.