Embryonic stem (ES) cells are capable of indefinite self-renewal while retaining the ability to differentiate to any of the three germ layers that give rise to all somatic cell types. An emerging view is that a core set of transcription factors, including Oct4, Sox2 and Nanog, form a robust autoregulatory circuit that maintains ES cells in a self-renewing state. To accommodate the capacity of such cells to undergo germ layer-specific differentiation, we predicted a post-translational mechanism that could negatively regulate these core self-renewal factors. Here we report caspaseinduced cleavage of Nanog in differentiating ES cells. Stem cells lacking the Casp3 gene showed marked defects in differentiation, while forced expression of a caspase cleavage-resistant Nanog mutant in ES cells strongly promoted self-renewal. These results link a major component of the programmed cell death pathway to the regulation of ES cell development.