Polycomb repressive complex 2 and the epigenetic mark that it deposits, H3K27me3, are evolutionarily conserved and play critical roles in development and cancer. However, their roles in cell fate decisions in early embryonic development remain poorly understood. Here we report that knockout of polycomb repressive complex 2 genes in human embryonic stem cells causes pluripotency loss and spontaneous differentiation toward a meso-endoderm fate, owing to de-repression of BMP signalling. Moreover, human embryonic stem cells with deletion of EZH1 or EZH2 fail to differentiate into ectoderm lineages. We further show that polycomb repressive complex 2-deficient mouse embryonic stem cells also release Bmp4 but retain their pluripotency. However, when converted into a primed state, they undergo spontaneous differentiation similar to that of hESCs. In contrast, polycomb repressive complex 2 is dispensable for pluripotency when human embryonic stem cells are converted into the naive state. Our studies reveal both lineage- and pluripotent state-specific roles of polycomb repressive complex 2 in cell fate decisions.Polycomb repressive complex 2 (PRC2) plays an essential role in development by modifying chromatin but what this means at a cellular level is unclear. Here, the authors show that ablation of PRC2 genes in human embryonic stem cells and in mice results in changes in pluripotency and the primed state of cells.