As a novel epigenetic mechanism, histone H3 methylation at R17 and R26, which is mainly catalyzed by coactivator-associated protein arginine methyltransferase 1 (CARM1), has been reported to modulate the transcription of key pluripotency factors and to regulate pluripotency in mouse embryos and mouse embryonic stem cells (mESCs) in previous studies. However, the role of CARM1 in human embryonic stem cells (hESCs) and the regulatory mechanism that controls CARM1 expression during ESCs differentiation are presently unknown. Here, we demonstrate that CARM1 plays an active role in the resistance to differentiation in hESCs by regulating pluripotency genes in response to BMP4. In a functional screen, we identified the miR-181 family as a regulator of CARM1 that is induced during ESC differentiation and show that endogenous miR-181c represses the expression of CARM1. Depletion of CARM1 or enforced expression of miR-181c inhibits the expression of pluripotency genes and induces differentiation independent of BMP4, whereas overexpression of CARM1 or miR-181c inhibitor elevates Nanog and impedes differentiation. Furthermore, expression of CARM1 rescue constructs inhibits the effect of miR-181c overexpression in promoting differentiation. Taken together, our findings demonstrate the importance of a miR-181c-CARM1 pathway in regulating the differentiation of hESCs.