Histone variants can replace canonical histones in the nucleosome and modify chromatin structure and gene expression. The histone variant H3.3 preferentially associates with active chromatin and has been implicated in the regulation of a diverse range of developmental processes. However, the mechanisms by which H3.3 may regulate gene activity are unclear and gene duplication has hampered an analysis of H3.3 function in mouse. Here, we report that the specific knockdown of H3.3 in fertilized mouse zygotes leads to developmental arrest at the morula stage. This phenotype can be rescued by exogenous H3.3 but not by canonical H3.1 mRNA. Loss of H3.3 leads to over-condensation and mis-segregation of chromosomes as early as the two-cell stage, with corresponding high levels of aneuploidy, but does not appear to affect zygotic gene activation at the two-cell stage or lineage gene transcription at the morula stage. H3.3-deficient embryos have significantly reduced levels of markers of open chromatin, such as H3K36me2 and H4K16Ac. Importantly, a mutation in H3.3K36 that disrupts H3K36 methylation (H3.3K36R) does not rescue the H3.3 knockdown (KD) phenotype. In addition, H3.3 KD embryos have increased incorporation of linker H1. Knockdown of Mof (Kat8), an acetyltransferase specific for H4K16, similarly leads to excessive H1 incorporation. Remarkably, pan-H1 RNA interference (RNAi) partially rescues the chromosome condensation of H3.3 KD embryos and allows development to the blastocyst stage. These results reveal that H3.3 mediates a balance between open and condensed chromatin that is crucial for the fidelity of chromosome segregation during early mouse development.