The tumour suppressor p53 becomes activated in response to upstream stress signals, such as DNA damage, and causes cell-cycle arrest or apoptosis. Here we report a novel role for p53 in the differentiation of mouse embryonic stem cells (ESCs). p53 binds to the promoter of Nanog, a gene required for ESC self-renewal, and suppresses Nanog expression after DNA damage. The rapid down-regulation of Nanog mRNA during ESC differentiation correlates with the induction of p53 transcriptional activity and Ser 315 phosphorylation. The importance of Ser 315 phosphorylation was revealed by the finding that induction of p53 activity is impaired in p53(S315A) knock-in ESCs during differentiation, leading to inefficient suppression of Nanog expression. The decreased inhibition of Nanog expression in p53(S315A) ESCs during differentiation is due to an impaired recruitment of the co-repressor mSin3a to the Nanog promoter. These findings indicate an alternative mechanism for p53 to maintain genetic stability in ESCs, by inducing the differentiation of ESCs into other cell types that undergo efficient p53-dependent cell-cycle arrest and apoptosis.