Cellular differentiation during embryogenesis involves complex gene regulation to enable the activation and repression of genes. Here, we show that mesodermal competence is inhibited in Xenopus embryos depleted of histones H3 and H3.3, which fail to respond to Nodal/Activin signaling and exhibit concomitant loss of mesodermal gene expression. We find that transcriptional activation in gastrula embryos does not correlate with promoter deposition of H3.3. Instead, gastrulation defects in H3.3/H3-deficient embryos are partially rescued with concurrent depletion of the linker histone H1A. In addition, we show that linker histone H1-induced premature loss of mesodermal competence in animal cap explants can be abrogated with the overexpression of nucleosomal H3.3/H3. Our findings establish a chromatin-mediated regulatory mechanism in which a threshold level of H3 is required to prevent H1-induced gene repression, and thus facilitate mesodermal differentiation in response to inductive signaling.