The interplay between polycomb and trithorax complexes has been implicated in embryonic stem cell (ESC) self-renewal and differentiation. It has been shown recently that WRD5 and Dpy-30, specific components of the SET1/MLL protein complexes, play important roles during ESC self-renewal and differentiation of neural lineages. However, not much is known about how and where specific trithorax complexes are targeted to genes involved in self-renewal or lineage-specification. Here, we report that the recruitment of the hSET1A histone H3K4 methyltransferase (HMT) complex by transcription factor USF1 is required for mesoderm specification and lineage differentiation. In undifferentiated ESCs, USF1 maintains hematopoietic stem/progenitor cell (HS/PC) associated bivalent chromatin domains and differentiation potential. Furthermore, USF1 directed recruitment of the hSET1A complex to the HoxB4 promoter governs the transcriptional activation of HoxB4 gene and regulates the formation of early hematopoietic cell populations. Disruption of USF or hSET1A function by overexpression of a dominant-negative AUSF1 mutant or by RNA-interference-mediated knockdown, respectively, led to reduced expression of mesoderm markers and inhibition of lineage differentiation. We show that USF1 and hSET1A together regulate H3K4me3 modifications and transcription preinitiation complex assembly at the hematopoietic-associated HoxB4 gene during differentiation. Finally, ectopic expression of USF1 in ESCs promotes mesoderm differentiation and enforces the endothelial-to-hematopoietic transition by inducing hematopoietic-associated transcription factors, HoxB4 and TAL1. Taken together, our findings reveal that the guided-recruitment of the hSET1A histone methyltransferase complex and its H3K4 methyltransferase activity by transcription regulator USF1 safeguards hematopoietic transcription programs and enhances mesoderm/hematopoietic differentiation.