Significance Controlling the proliferation and proper fate acquisition of pluripotent stem cells is a major challenge in regenerative therapies today. Our study reveals that the estrogen receptor beta (ERβ) is an important factor in maintaining the neuroepithelial and midbrain stem cell pools by repressing proliferation and early nonneuronal fate acquisition. We report on the factors that underlie these effects of ERβ. Further, we report that ERβ facilitates midbrain dopaminergic fate and function. The data presented in this study suggest that ERβ is a factor to be considered in designing regenerative therapies for example neurodegenerative diseases such as Parkinson’s disease.