Lissencephaly-1(LIS1) is associated with neurodevelopmental diseases and is known to regulate the molecular motor cytoplasmic dynein activity. Here we show that LIS1 is essential for the viability of mouse embryonic stem cells (mESCs), and it governs the physical properties of these cells. LIS1 dosage substantially affects gene expression, and we uncovered an unexpected interaction of LIS1 with RNA and RNA-binding proteins, most prominently the Argonaute complex. We demonstrate that LIS1 overexpression partially rescued the extracellular matrix (ECM) expression and mechanosensitive genes conferring stiffness to Argonaute null mESCs. Collectively, our data transforms the current perspective on the roles of LIS1 in post-transcriptional regulation underlying development and mechanosensitive processes.