Faithful transcription initiation is critical for accurate gene expression, yet the mechanisms underlying specific transcription start site (TSS) selection in mammals remain unclear. Here, we show that the histone-fold domain protein NF-Y, a ubiquitously expressed transcription factor, controls the fidelity of transcription initiation at gene promoters in mouse embryonic stem cells. We report that NF-Y maintains the region upstream of TSSs in a nucleosome-depleted state while simultaneously protecting this accessible region against aberrant and/or ectopic transcription initiation. We find that loss of NF-Y binding in mammalian cells disrupts the promoter chromatin landscape, leading to nucleosomal encroachment over the canonical TSS. Importantly, this chromatin rearrangement is accompanied by upstream relocation of the transcription pre-initiation complex and ectopic transcription initiation. Further, this phenomenon generates aberrant extended transcripts that undergo translation, disrupting gene expression profiles. These results suggest NF-Y is a central player in TSS selection in metazoans and highlight the deleterious consequences of inaccurate transcription initiation.