The maintenance of pluripotency in mouse embryonic stem cells (mESCs) relies on the activity of a transcriptional network that is fuelled by the activity of three transcription factors (Nanog, Oct4 and Sox2) and balanced by the repressive activity of Tcf3. Extracellular signals modulate the activity of the network and regulate the differentiation capacity of the cells. Wnt/β-catenin signaling has emerged as a significant potentiator of pluripotency: increases in the levels of β-catenin regulate the activity of Oct4 and Nanog, and enhance pluripotency. A recent report shows that β-catenin achieves some of these effects by modulating the activity of Tcf3, and that this effect does not require its transcriptional activation domain. Here, we show that during self-renewal there is negligible transcriptional activity of β-catenin and that this is due to its tight association with membranes, where we find it in a complex with Oct4 and E-cadherin. Differentiation triggers a burst of Wnt/β-catenin transcriptional activity that coincides with the disassembly of the complex. Our results establish that β-catenin, but not its transcriptional activity, is central to pluripotency acting through a β-catenin/Oct4 complex.