Tcea3 is present in high concentrations in mouse embryonic stem cells (mESCs) and functions to activate Lefly1, a negative regulator of Nodal signaling. The Nodal pathway has numerous biological activities, including mesoderm induction and patterning in early embryogenesis. Here, we demonstrate that the suppression of Tcea3 in mESCs shifts the cells from pluripotency into enhanced mesoderm development. Vascular endothelial growth factor A (VEGFA) and VEGFC, major transcription factors that regulate vasculogenesis, are activated in Tcea3 knocked down (Tcea3 KD) mESCs. Moreover, differentiating Tcea3 KD mESCs have perturbed gene expression profiles with suppressed ectoderm and activated mesoderm lineage markers. Most early differentiating Tcea3 KD cells expressed Brachyury-T, a mesoderm marker, whereas control cells did not express the gene. Finally, development of chimeric embryos that included Tcea3 KD mESCs was perturbed.