The underlying mechanism of transcriptional co-repressor ETO2 during early erythropoiesis and hemoglobin switching is unclear. We find that absence of ETO2 in mice interferes with down-regulation of PU.1 and GATA2 in the fetal liver, impeding a key step required for commitment to erythroid maturation. In human β-globin transgenic Eto2 null mice and in human CD34+ erythroid progenitor cells with reduced ETO2, loss of ETO2 results in ineffective silencing of embryonic/fetal globin gene expression, impeding hemoglobin switching during erythroid differentiation. ETO2 occupancy genome-wide occurs virtually exclusively at LDB1-complex binding sites in enhancers and ETO2 loss leads to increased enhancer activity and expression of target genes. ETO2 recruits the NuRD nucleosome remodeling and deacetylation complex to regulate histone acetylation and nucleosome occupancy in the β-globin locus control region and γ-globin gene. Loss of ETO2 elevates LDB1, MED1 and Pol II in the locus and facilitates fetal γ-globin/LCR looping and γ-globin transcription. Absence of the ETO2 hydrophobic heptad repeat region impairs ETO2-NuRD interaction and function in antagonizing γ-globin/LCR looping. Our results reveal a pivotal role for ETO2 in erythropoiesis and globin gene switching through its repressive role in the LDB1 complex, affecting the transcription factor and epigenetic environment and ultimately restructuring chromatin organization.