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How BMP signaling integrates into and destabilizes the pluripotency circuitry of human pluripotent stem cells (hPSCs) to initiate differentiation into individual germ layers is a long-standing puzzle. Here we report muscle segment homeobox 2 (MSX2), a homeobox transcription factor of msh family, as a direct target gene of BMP signaling and a master mediator of hPSCs' differentiation to mesendoderm. Enforced expression of MSX2 suffices to abolish pluripotency and induce directed mesendoderm differentiation of hPSCs, while MSX2 depletion impairs mesendoderm induction. MSX2 is a direct target gene of the BMP pathway in hPSCs, and can be synergistically activated by Wnt signals via LEF1 during mesendoderm induction. Furthermore, MSX2 destabilizes the pluripotency circuitry through direct binding to the SOX2 promoter and repression of SOX2 transcription, while MSX2 controls mesendoderm lineage commitment by simultaneous suppression of SOX2 and induction of NODAL expression through direct binding and activation of the Nodal promoter. Interestingly, SOX2 can promote the degradation of MSX2 protein, suggesting a mutual antagonism between the two lineage-specifying factors in the control of stem cell fate. Together, our findings reveal crucial new mechanisms of destabilizing pluripotency and directing lineage commitment in hPSCs.

MSX2 mediates entry of human pluripotent stem cells into mesendoderm by simultaneously suppressing SOX2 and activating NODAL signaling