Fgf signaling via Erk activation has been associated with both neural induction and the generation of a primed state for the differentiation of embryonic stem cells (ESCs) to all somatic lineages. To dissect the role of Erk in both ESC self-renewal and lineage specification, we explored the requirements for this pathway in various in vitro differentiation settings. A combination of pharmacological inhibition of Erk signaling and genetic loss of function reveal a role for Erk signaling in endodermal, but not neural differentiation. Neural differentiation occurs normally despite a complete block to Erk phosphorylation. In support of this, Erk activation in ESCs derepresses primitive endoderm (PrE) gene expression as a consequence of inhibiting the pluripotent/epiblast network. The early response to Erk activation correlates with functional PrE priming, whereas sustained Erk activity results in PrE differentiation. Taken together, our results suggest that Erk signaling suppresses pluripotent gene expression to enable endodermal differentiation.