Early mammalian development entails genome-wide epigenome remodeling, including DNA methylation erasure and reacquisition, which facilitates developmental competence. To uncover the mechanisms that orchestrate DNA methylation dynamics, we coupled a single-cell ratiometric DNA methylation reporter with unbiased CRISPR screening in murine embryonic stem cells (ESCs). We identify key genes and regulatory pathways that drive global DNA hypomethylation, and characterize roles for Cop1 and Dusp6. We also identify Dppa2 and Dppa4 as essential safeguards of focal epigenetic states. In their absence, developmental genes and evolutionarily young LINE1 elements, which are specifically bound by DPPA2, lose H3K4me3 and gain ectopic de novo DNA methylation in pluripotent cells. Consequently, lineage-associated genes and LINE1 acquire a repressive epigenetic memory, which renders them incompetent for activation during future lineage specification. Dppa2/4 thereby sculpt the pluripotent epigenome by facilitating H3K4me3 and bivalency to counteract de novo methylation, a function co-opted by evolutionarily young LINE1 to evade epigenetic decommissioning.