© 2016 Castaño et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. The successful use of specialized cells in regenerative medicine requires an optimization in the differentiation protocols that are currently used. Understanding the molecular events that take place during the differentiation of human pluripotent cells is essential for the improvement of these protocols and the generation of high quality differentiated cells. In an effort to understand the molecular mechanisms that govern differentiation we identify the methyltransferase SETD7 as highly induced during the differentiation of human embryonic stem cells and differentially expressed between induced pluripotent cells and somatic cells. Knock-down of SETD7 causes differentiation defects in human embryonic stem cell including delay in both the silencing of pluripotency-related genes and the induction of differentiation genes. We show that SETD7 methylates linker histone H1 in vitro causing conformational changes in H1. These effects correlate with a decrease in the recruitment of H1 to the pluripotency genes OCT4 and NANOG during differentiation in the SETD7 knockdown that might affect the proper silencing of these genes during differentiation.