Embryonic stem cells (ESCs) possess the capacity to proliferate indefinitely in an undifferentiated state and to differentiate into various cell types in an organism. However, the critical question of how self-renewal and differentiation are precisely regulated in ESCs is not entirely understood at present. Here, we report the essential role of Tbx3, a pluripotency-related transcription factor of the T-box gene family, for both the maintenance of self-renewal of mouse ESCs and for their differentiation into extraembryonic endoderm (ExEn). We show that Tbx3 is highly expressed in ExEn cells in addition to undifferentiated ESCs. Knockdown of Tbx3 expression using tetracycline-regulated Tbx3 siRNA resulted in the attenuation of ESC self-renewal ability and aberrant differentiation processes, including reduced ExEn differentiation but enhanced ectoderm and trophectoderm differentiation. Conversely, inducible forced expression of Tbx3 triggered ExEn lineage commitment. Mechanistically, Tbx3 directly activated the expression of Gata6, an essential regulator of ExEn. Interestingly, Tbx3 modulated H3K27me3 modification and the association of the PRC2 complex with the promoter region of Gata6. Taken together, the results of this study revealed a previously unappreciated role of a pluripotency factor in ExEn differentiation. Additionally, our data reveal that Tbx3 may function through direct binding and epigenetic modification of histones on the Gata6 promoter to maintain the ExEn differentiation potential of ESCs. © 2011 by The American Society for Biochemistry and Molecular Biology, Inc.