Through the histone methyltransferase EZH2, the Polycomb complex PRC2 mediates H3K27me3 and is associated with transcriptional repression. PRC2 regulates cell-fate decisions in model organisms; however, its role in regulating cell differentiation during human embryogenesis is unknown. Here, we report the characterization of EZH2-deficient human embryonic stem cells (hESCs). H3K27me3 was lost upon EZH2 deletion, identifying an essential requirement for EZH2 in methylating H3K27 in hESCs, in contrast to its non-essential role in mouse ESCs. Developmental regulators were derepressed in EZH2-deficient hESCs, and single-cell analysis revealed an unexpected acquisition of lineage-restricted transcriptional programs. EZH2-deficient hESCs show strongly reduced self-renewal and proliferation, thereby identifying a more severe phenotype compared to mouse ESCs. EZH2-deficient hESCs can initiate differentiation toward developmental lineages; however, they cannot fully differentiate into mature specialized tissues. Thus, EZH2 is required for stable ESC self-renewal, regulation of transcriptional programs, and for late-stage differentiation in this model of early human development.