Transcription factor (TF)–induced reprogramming of somatic cells into induced pluripotent stem cells (iPSC) is associated with genome-wide changes in chromatin modifications. Polycomb-mediated histone H3 lysine-27 trimethylation (H3K27me3) has been proposed as a defining mark that distinguishes the somatic from the iPSC epigenome. Here, we dissected the functional role of H3K27me3 in TF–induced reprogramming through the inactivation of the H3K27 methylase EZH2 at the onset of reprogramming. Our results demonstrate that surprisingly the establishment of functional iPSC proceeds despite global loss of H3K27me3. iPSC lacking EZH2 efficiently silenced the somatic transcriptome and differentiated into tissues derived from the three germ layers. Remarkably, the genome-wide analysis of H3K27me3 in Ezh2 mutant iPSC cells revealed the retention of this mark on a highly selected group of Polycomb targets enriched for developmental regulators controlling the expression of lineage specific genes. Erasure of H3K27me3 from these targets led to a striking impairment in TF–induced reprogramming. These results indicate that PRC2-mediated H3K27 trimethylation is required on a highly selective core of Polycomb targets whose repression enables TF–dependent cell reprogramming.