Changes in higher order chromatin organisation have been linked to transcriptional regulation; however, little is known about how such organisation alters during embryonic development or how it is regulated by extrinsic signals. Here we analyse changes in chromatin organisation as neural differentiation progresses, exploiting the clear spatial separation of the temporal events of differentiation along the elongating body axis of the mouse embryo. Combining fluorescence in situ hybridisation with super-resolution structured illumination microscopy, we show that chromatin around key differentiation gene loci Pax6 and Irx3 undergoes both decompaction and displacement towards the nuclear centre coincident with transcriptional onset. Conversely, down-regulation of Fgf8 as neural differentiation commences correlates with a more peripheral nuclear position of this locus. During normal neural differentiation, fibroblast growth factor (FGF) signalling is repressed by retinoic acid, and this vitamin A derivative is further required for transcription of neural genes. We show here that exposure to retinoic acid or inhibition of FGF signalling promotes precocious decompaction and central nuclear positioning of differentiation gene loci. Using the Raldh2 mutant as a model for retinoid deficiency, we further find that such changes in higher order chromatin organisation are dependent on retinoid signalling. In this retinoid deficient condition, FGF signalling persists ectopically in the elongating body, and importantly, we find that inhibiting FGF receptor (FGFR) signalling in Raldh2-/- embryos does not rescue differentiation gene transcription, but does elicit both chromatin decompaction and nuclear position change. These findings demonstrate that regulation of higher order chromatin organisation during differentiation in the embryo can be uncoupled from the machinery that promotes transcription and, for the first time, identify FGF as an extrinsic signal that can direct chromatin compaction and nuclear organisation of gene loci.