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Embryonic stem cells (ESCs) maintain self‐renewal while ensuring a rapid response to differentiation signals, but the exact mechanism of this process remains unknown. PD2 is the human homolog of the RNA polymerase II‐associated factor 1 (Paf1). The Paf1/PD2 is a member of the human PAF complex that consists of four other subunits, hCdc73, hLeo1, hCtr9, and hSki8, and is involved in the regulation of transcriptional elongation and further downstream events. Here, we show that Paf1/PD2 is overexpressed in mouse ESCs and is involved in the maintenance of mouse ESCs. The Paf1/PD2 knockdown and knockout ESCs grown under self‐renewal conditions express substantially reduced levels of self‐renewal regulators, including Oct3/4, SOX2, Nanog, and Shh. We observed that the level of Paf1/PD2 expression is much higher in self‐renewing mouse embryonic carcinoma cells than in the differentiating cells. Knockout of Paf1/PD2 altered ESC phenotype by increasing apoptosis and decreasing the percentage of cells in S‐phase of the cell cycle. Interestingly, we found that the key genes that regulate endodermal differentiation (Gata4, Gata6, and Fgf8) are induced in the Paf1/PD2 heterozygous knockout ESCs. This suggests that Paf1/PD2 plays a specific role in regulating early commitment of ESCs to endodermal differentiation. Furthermore, for the first time, we showed that Paf1/PD2 protein interacts with Oct3/4 and RNA polymerase II, and through this interaction Paf1/PD2 may regulate Oct3/4‐mediated gene expression. Thus, the Paf1/PD2 protein is a newly discovered element of the interconnected regulatory network that maintains the self‐renewal of mouse ESCs. S TEM  C ELLS  2009;27:3001–3011

RNA Polymerase II Associated Factor 1/PD2 Maintains Self‐Renewal by Its Interaction with Oct3/4 in Mouse Embryonic Stem Cells