Cohesins appear to have critical functions beyond mitotic cohesion. Our data on a cohesin-associated Pds5-paralog, APRIN, indicate a novel cohesin role in stem cell differentiation. APRIN/Pds5B is lost in many cancers and it is a putative tumor suppressor. Its mutations in the germ line, however, generate birth defects. We reasoned that as both cancer and birth defects share disrupted stem cell differentiation, the data suggest an APRIN/Pds5B cohesin function in stem cells. We used an embryonal carcinoma stem cell model and show here that (i) APRIN expression is precisely coordinated with stem cell differentiation; (ii) this coordination involves surface-contact and endocrine pathways; and (iii) APRIN/Pds5b coordination is critical in stem/progenitor exit decisions. APRIN knockdown disrupted Oct4, Nanog and SOX2 patterns, differentiation failed and the resulting immature proliferative cells did not progress beyond proneural progenitor phase. Furthermore, the phenotype-blocked progenitor exit (Mash-1 þ ); failed E-cadherin exit (E-Cadh low þ ); incomplete N-cadherin transition (N-Cadh low þ ); retained proliferative capacity (c-myc þ ); irregular stemness (SOX2 late þ þ ) and lost response to contact and hormonal cues-shares similarities with cancer-initiating cells. The data suggest novel APRIN/Pds5B-linked cohesin roles in stem/progenitor programs and a new mechanism in tumor suppression.