The discovery that somatic cells can be reprogrammed to a pluripotent state and instructed to differentiate into various cell types promises to revolutionise regenerative medicine. However, the molecular mechanisms that underlie reprogramming and cell fate decisions are incompletely understood, hampering the development of rational approaches to promote cell reprogramming. Previous work has implicated the peptidylarginine deiminase 4 (PADI4) in the regulation of pluripotency during the reprogramming of somatic cells into induced pluripotent stem (iPS) cells. Using transcription factor-driven reprogramming of neural stem cells, we show that widespread histone citrullination within reprogramming cultures precedes the expression of pluripotency genes and the formation of iPS colonies. PADI4 is expressed exclusively in cells that do not reprogramme and citrullinated chromatin is found in the extracellular space surrounding the emerging iPS colonies. Pharmacological inhibition of PADI4 or extracellular chromatin sensing pathways reduces reprogramming efficiency, suggesting that PADI4 and citrullinated chromatin support reprogramming in a non-cell-autonomous manner. Extracellular citrullinated chromatin is also detected in mouse tissues upon the activation of transgenes expressing the reprogramming transcription factors as well as in regenerative blastema, suggesting that it may act as a cell communication mechanism mediating cell fate transitions also in vivo. Our work uncovers a novel mechanistic principle of cell reprogramming and cell fate control and has the potential to open new approaches for improving reprogramming efficiency and tissue regeneration.