Canonical Wnt signaling supports the pluripotency of embryonic stem cells (ESCs) 
but also promotes differentiation of early mammalian cell lineages. To explain 
these paradoxical observations, we explored the gene regulatory networks at 
play. Canonical Wnt signaling is intertwined with the pluripotency network 
comprising Nanog, Oct4, and Sox2 in mouse ESCs. In defined media supporting the 
derivation and propagation of ESCs, Tcf3 and β-catenin interact with Oct4; Tcf3 
binds to Sox motif within Oct-Sox composite motifs that are also bound by 
Oct4-Sox2 complexes. Furthermore, canonical Wnt signaling upregulates the 
activity of the Pou5f1 distal enhancer via the Sox motif in ESCs. When viewed in 
the context of published studies on Tcf3 and β-catenin mutants, our findings 
suggest Tcf3 counters pluripotency by competition with Sox2 at these sites, and 
Tcf3 inhibition is blocked by β-catenin entry into this complex. Wnt pathway 
stimulation also triggers β-catenin association at regulatory elements with 
classic Lef/Tcf motifs associated with differentiation programs. The failure to 
activate these targets in the presence of a mitogen-activated protein kinase 
kinase (MEK)/extracellular signal-regulated kinase (ERK) inhibitor essential for 
ESC culture suggests MEK/ERK signaling and canonical Wnt signaling combine to 
promote ESC differentiation.