Retinoic acid (RA) regulates clustered Hox gene expression during embryogenesis and is required to establish the anterior-posterior body plan. Using mutant embryonic stem cell lines deficient in the RA receptor γ (RARγ) or Hoxa1 3'-RA-responsive element, we studied the kinetics of transcriptional and epigenomic patterning responses to RA. RARγ is essential for RA-induced Hox transcriptional activation, and deletion of its binding site in the Hoxa1 enhancer attenuates transcriptional and epigenomic activation of both Hoxa and Hoxb gene clusters. The kinetics of epigenomic reorganization demonstrate that complete erasure of the polycomb repressive mark H3K27me3 is not necessary to initiate Hox transcription. RARγ is not required to establish the bivalent character of Hox clusters, but RA/RARγ signaling is necessary to erase H3K27me3 from activated Hox genes during embryonic stem cell differentiation. Highly coordinated, long range epigenetic Hox cluster reorganization is closely linked to transcriptional activation and is triggered by RARγ located at the Hoxa1 3'-RA-responsive element.