Embryonic stem cells (ESCs) have transcriptionally permissive chromatin enriched for gene activation-associated histone modifications. A striking exception is DOT1L-mediated H3K79 dimethylation (H3K79me2) that is considered a positive regulator of transcription. We find that ESCs are depleted for H3K79me2 at shared locations of enrichment with somatic cells, which are highly and ubiquitously expressed housekeeping genes, and have lower RNA polymerase II (RNAPII) at the transcription start site (TSS) despite greater nascent transcription. Inhibiting DOT1L increases the efficiency of reprogramming of somatic to induced pluripotent stem cells, enables an ESC-like RNAPII pattern at the TSS, and functionally compensates for enforced RNAPII pausing. DOT1L inhibition increases H3K27 methylation and RNAPII elongation-enhancing histone acetylation without changing the expression of the causal histone-modifying enzymes. Only the maintenance of elevated histone acetylation is essential for enhanced reprogramming and occurs at loci that are depleted for H3K79me2. Thus, DOT1L inhibition promotes the hyperacetylation and hypertranscription pluripotent properties.