AbstractEarly during preimplantation development and in heterogeneous mouse embryonic stem cells (mESC) culture, pluripotent cells are specified towards either the primed epiblast or the primitive endoderm (PE) lineage. Canonical Wnt signaling is crucial for safeguarding naive pluripotency and embryo implantation, yet the role and relevance of canonical Wnt inhibition during early mammalian development remains unknown. Here, we demonstrate that transcriptional repression exerted by Wnt/TCF7L1 promotes PE differentiation of mESCs and in preimplantation inner cell mass. Time-series RNA sequencing and promoter occupancy data reveal that TCF7L1 binds and represses genes encoding essential naive pluripotency factors and indispensable regulators of the formative pluripotency program, including Otx2 and Lef1. Consequently, TCF7L1 promotes pluripotency exit and suppresses epiblast lineage formation, thereby driving cells into PE specification. Conversely, TCF7L1 is required for PE specification as deletion of Tcf7l1 abrogates PE differentiation without restraining epiblast priming. Taken together, our study underscores the importance of transcriptional Wnt inhibition in regulating lineage specification in ESCs and preimplantation embryo development as well as identifies TCF7L1 as key regulator of this process.