Abstract Correct B cell identity at each stage of cellular differentiation during B lymphocyte development is critically dependent on a tightly controlled epigenomic landscape. We previously identified HDAC7 as an essential regulator of early B cell development and its absence leads to a drastic block at the pro-B to pre-B cell transition. More recently, we demonstrated that HDAC7 loss in pro-B-ALL in infants associates with a worse prognosis. Here we delineate the molecular mechanisms by which HDAC7 modulates early B cell development. We find that HDAC7 deficiency drives global chromatin de-condensation, histone marks deposition and deregulates other epigenetic regulators and mobile elements. Specifically, the absence of HDAC7 induces TET2 expression, which promotes DNA 5-hydroxymethylation and chromatin de-condensation. HDAC7 deficiency also results in the aberrant expression of microRNAs and LINE-1 transposable elements. These findings shed light on the mechanisms by which HDAC7 loss or misregulation may lead to B cell–based hematological malignancies.