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Cells must sense and respond to nutrients in their environment, and specialized cells must synthesize metabolic products required for their function. Pluripotent stem cells have the ability to differentiate into a wide variety of specialized cells. How metabolic state contributes to stem cell differentiation is not understood. In this study, we show that RNA-binding by the stem cell translation regulator Musashi-1 (MSI1) is allosterically inhibited by 18\u201322 carbon \u03c9-9 monounsaturated fatty acids. The fatty acid binds to the N-terminal RNA Recognition Motif (RRM) and induces a conformational change that prevents RNA association. Musashi proteins are critical for development of the brain, blood, and epithelium. We identify stearoyl-CoA desaturase-1 as a MSI1 target, revealing a feedback loop between \u03c9-9 fatty acid biosynthesis and MSI1 activity. 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