Pluripotent embryonic stem (ES) cells must select between alternative fates of self-replication and lineage commitment during continuous proliferation. Here, we delineate the role of autocrine production of fibroblast growth factor 4 (Fgf4) and associated activation of the Erk1/2 (Mapk3/1) signalling cascade. Fgf4 is the major stimulus activating Erk in mouse ES cells. Interference with FGF or Erk activity using chemical inhibitors or genetic ablations does not impede propagation of undifferentiated ES cells. Instead, such manipulations restrict the ability of ES cells to commit to differentiation. ES cells lacking Fgf4 or treated with FGF receptor inhibitors resist neural and mesodermal induction, and are refractory to BMP-induced non-neural differentiation. Lineage commitment potential of Fgf4-null cells is restored by provision of FGF protein. Thus, FGF enables rather than antagonises the differentiation activity of BMP. The key downstream role of Erk signalling is revealed by examination of Erk2-null ES cells, which fail to undergo either neural or mesodermal differentiation in adherent culture, and retain expression of pluripotency markers Oct4, Nanog and Rex1. These findings establish that Fgf4 stimulation of Erk1/2 is an autoinductive stimulus for naïve ES cells to exit the self-renewal programme. We propose that the Erk cascade directs transition to a state that is responsive to inductive cues for germ layer segregation. Consideration of Erk signalling as a primary trigger that potentiates lineage commitment provides a context for reconciling disparate views on the contribution of FGF and BMP pathways during germ layer specification in vertebrate embryos.