Embryonic stem (ES) cells undergo extended proliferation while remaining poised for multilineage differentiation. A unique network of transcription factors may characterize self-renewal and simultaneously suppress differentiation. We applied expression cloning in mouse ES cells to isolate a self-renewal determinant. Nanog is a divergent homeodomain protein that directs propagation of undifferentiated ES cells. Nanog mRNA is present in pluripotent mouse and human cell lines, and absent from differentiated cells. In preimplantation embryos, Nanog is restricted to founder cells from which ES cells can be derived. Endogenous Nanog acts in parallel with cytokine stimulation of Stat3 to drive ES cell self-renewal. Elevated Nanog expression from transgene constructs is sufficient for clonal expansion of ES cells, bypassing Stat3 and maintaining Oct4 levels. Cytokine dependence, multilineage differentiation, and embryo colonization capacity are fully restored upon transgene excision. These findings establish a central role for Nanog in the transcription factor hierarchy that defines ES cell identity.