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Differentiation of the embryonic stem cells (ESCs) is regulated by a variety of different signaling pathways. Genetic depletion of murine Pelota gene (Pelo) leads to early embryonic lethality. Here, we aimed at determining the embryonic stage and deciphering the dysregulated signaling pathways affected upon Pelo deletion. We found that development of PELO‐null embryos is perturbed between the embryonic days E4.5 and E5.5, at which first differentiation process of ESCs takes place. Molecular analysis revealed enhanced activity of phosphoinositide 3‐kinase–protein kinase B/ AKT (PI3K‐PKB/AKT) signaling, but nuclear accumulation of forkhead box O1 (FOXO1), and upregulation of the pluripotency‐related gene, Oct4, in mutant ESCs cultured under differentiation condition. Despite increased levels of nuclear β‐catenin in PELO‐null ESCs as a result of decreased activity of glycogen synthase kinase‐3β, the activity of the canonical wingless (Wnt)/β‐catenin/T‐cell factor (TCF) was significantly attenuated as judged by the promoter reporter assay, downregulated Wnt/β‐catenin target genes, and impaired cell proliferation. Interestingly, we demonstrated an increased binding of β‐catenin to FOXO1 in PELO‐mutant ESCs cultured under differentiation condition that could explain, on one side, the nuclear accumulation of FOXO1 protein and hence persistent pluripotency of PELO‐mutant ESCs, and on the other side, the dysregulated transcriptional activity of β‐catenin/TCF and therefore attenuated PELO‐null ESC self‐renewal. Taken together, our results strongly suggest that PELO deletion averts ESC differentiation through promoting FOXO1/β‐catenin binding with subsequent dysregulation of FOXO1 and canonical β‐catenin/TCF signaling pathways. [ABSTRACT FROM AUTHOR]