The pluripotency of the embryonic stem (ES) cells, i.e. the properties to proliferate indefinitely in culture and differentiate into virtually every other cell type in the body, is controlled by a handful of transcription factors, which are proteins that bind to DNA and selectively activate expression of specific genes. The main objective of this project is to understand how transcription factors mediate the selective activation of genes involved in pluripotency of the ES cells. Previous studies have shown that transcription factors act by interacting with specific DNA sequences with regulatory function. How these factors regulate the levels of gene expression has not been fully understood. Previously, we demonstrated that ES cell differentiation is accompanied by dynamic and characteristic modifications of the histone proteins at genomic regions where the key stem cell regulatory factors bind. In the current funding cycle, we determined global dynamic histone modifications in human ES cells as they differentiate into four distinct cell lineages that represent major cell types in early embryos. We identified over 100,000 potential regulatory sequences that could participate in the maintenance of pluripotency or drive the differentiation of ES cells to specific lineages. Using bioinformatic analysis we identified a number of candidate transcription factors that recognize these candidate regulatory sequences and may play a role in ES cell differentiation. We further identified four large protein complexes that selectively bind to the regulatory sequences in ES cells in a way that depend on the presence of the characteristic histone modification. Results from the present research advanced our understanding of the mechanisms of gene activation in ES cells, and will help us devise better strategies to manipulate the embryonic stem cells for cell-based therapeutics.