Posttranslational histone modifications play important roles in regulating chromatin-based nuclear processes. Histone H2AK119 ubiquitination (H2Aub) is a prevalent modification and has been primarily linked to gene silencing. However, the underlying mechanism remains largely obscure. Here we report the identification of RSF1 (remodeling and spacing factor 1), a subunit of the RSF complex, as a H2Aub binding protein, which mediates the gene-silencing function of this histone modification. RSF1 associates specifically with H2Aub, but not H2Bub nucleosomes, through a previously uncharacterized and obligatory region designated as ubiquitinated H2A binding domain. In human and mouse cells, genes regulated by RSF1 overlap significantly with those controlled by RNF2/Ring1B, the subunit of Polycomb repressive complex 1 (PRC1) which catalyzes the ubiquitination of H2AK119. About 82% of H2Aub-enriched genes, including the classic PRC1 target Hox genes, are bound by RSF1 around their transcription start sites. Depletion of H2Aub levels by Ring1B knockout results in a significant reduction of RSF1 binding. In contrast, RSF1 knockout does not affect RNF2/Ring1B or H2Aub levels but leads to derepression of H2Aub target genes, accompanied by changes in H2Aub chromatin organization and release of linker histone H1. The action of RSF1 in H2Aub-mediated gene silencing is further demonstrated by chromatin-based in vitro transcription. Finally, RSF1 and Ring1 act cooperatively to regulate mesodermal cell specification and gastrulation during Xenopus early embryonic development. Taken together, these data identify RSF1 as a H2Aub reader that contributes to H2Aub-mediated gene silencing by maintaining a stable nucleosome pattern at promoter regions.