BAF (Brg/Brm-associated factors) complexes play important roles in development and are linked to chromatin plasticity at selected genomic loci. Nevertheless, a full understanding of their role in development and chromatin remodeling has been hindered by the absence of mutants completely lacking BAF complexes. Here, we report that the loss of BAF155/BAF170 in double-conditional knock-out (dcKO) mice eliminates all known BAF subunits, resulting in an overall reduction in active chromatin marks (H3K9Ac), a global increase in repressive marks (H3K27me2/3), and down-regulation of gene expression. We demonstrate that BAF complexes interact with H3K27 demethylases (JMJD3, UTX) and potentiate their activity. Importantly BAF complexes are indispensable for forebrain development, including proliferation, differentiation and cell survival of neural progenitor cells. Our findings reveal a molecular mechanism mediated by BAF complexes that controls global transcriptional program and chromatin state in development.