The bivalent hypothesis posits that genes encoding developmental regulators required for early lineage decisions are poised in stem/progenitor cells by the balance between a repressor histone modification (H3K27me3), mediated by the Polycomb Repressor Complex 2 (PRC2), and an activator modification (H3K4me3). In this study, we test whether this mechanism applies equally to genes that are not required until terminal differentiation. We focus on the RE1 Silencing Transcription Factor (REST) because it is expressed highly in stem cells and is an established global repressor of terminal neuronal genes. Elucidation of the REST complex, and comparison of chromatin marks and gene expression levels in control and REST-deficient stem cells, shows that REST target genes are poised by a mechanism independent of Polycomb, even at promoters which bear the H3K27me3 mark. Specifically, genes under REST control are actively repressed in stem cells by a balance of the H3K4me3 mark and a repressor complex that relies on histone deacetylase activity. Thus, chromatin distinctions between pro-neural and terminal neuronal genes are established at the embryonic stem cell stage by two parallel, but distinct, repressor pathways. DOI: http://dx.doi.org/10.7554/eLife.04235.001, eLife digest When an embryo is developing, genes are switched on or off at different times, for many different reasons. Many of these genes are switched off, or repressed, by making the DNA inaccessible to the various proteins and molecules that control gene activity. This is achieved by altering the way that the DNA is packaged into a compacted structure called chromatin. A host of proteins modify the structure of chromatin: it can be made more tightly packaged, which keeps genes switched off; or it can be made more loosely packaged, which allows the genes within to be accessed and switched on. The stem cells in an embryo are able to give rise to many different types of specialized cell. Genes that determine which cell type a stem cell will eventually become are often kept in a so-called ‘poised’ state, and have chromatin modifications that encourage genes to be switch on, as well as modifications that switch genes off. Current thinking is that this poised state allows these genes to be switched on or off rapidly in response to the signals that the cell receives during development. The only known protein complex that causes the chromatin to become more compacted in this poised state is the Polycomb complex. This complex binds to specific regions of DNA and is thought to allow stem cells to remain able to become different cell types by repressing the genes required for adopting a specialized cell fate. However, it is unclear if this poised state also regulates those genes that control the final stages of a cell becoming a specific cell type. McGann et al. investigated genes that are involved in the final stages of a nerve cell's development. These genes are regulated by another protein called REST, which acts to repress the genes in non-neuronal cells. McGann et al. found that the genes that are regulated by REST in embryonic stem cells from mice also have their chromatin modified in two contrasting ways. Some of the modifications are linked to switching genes on, while others are linked to keeping genes switched off. Thus these genes are also in a poised state. However, for these genes, this state is acquired without the activity of the Polycomb complex. The results of McGann et al. show that two similar, but distinct, mechanisms keep the genes required for the early and the late stages of nerve cell development in a poised state. If this poised state aids the development of other cell types (for example muscle or fat cells), uncovering how it is achieved could improve our ability to direct stem cells to develop into specific cell types and tissues. DOI: http://dx.doi.org/10.7554/eLife.04235.002