Transcription factor Foxa1 plays a critical role during neural differentiation and is induced immediately after retinoic acid (RA)-initiated differentiation of pluripotent P19 embryonal carcinoma cells, correlated with the downregulated expression of pluripotency-related genes such as Nanog. To study whether Foxa1 participates in the repression of pluripotency factors, we expressed Foxa1 ectopically in P19 cells and identified that Nanog was repressed directly by Foxa1. We confirmed that Foxa1 was able to interact with Grg3, which is a transcriptional corepressor that expresses in P19 cells as well as during RA-induced P19 cell differentiation. Knockdown of Foxa1 or Grg3 delayed the downregulation of Nanog expression during RA-induced P19 cell differentiation. Furthermore, we found that Foxa1 recruited Grg3 to the Nanog promoter -2kb upstream region and switched the promoter to an inactive chromatin status represented by typical modifications in histone H3. Together, our results suggested a critical involvement of Foxa1 in the negative regulation of Nanog expression during the differentiation of pluripotent stem cells.