The mechanisms controlling self-renewal versus lineage commitment in human embryonic stem (hES) cells are not well understood. Nonetheless, current knowledge suggests a crucial role for TGFbeta signaling in controlling these early fate decisions. We have investigated the effects of TGFbeta pathway activation and inhibition on gene expression in hES cells. Our data reveal that SMAD 2/3 signaling directly supports NANOG expression, while SMAD 1/5/8 activation moderately represses SOX2. In addition, genes encoding key developmentally relevant signaling molecules and transcription factors appear to be immediately downstream of SMAD 1/5/8 signaling, or require both SMAD 1/5/8 and 2/3 activation, or inactivation of TGFbeta signaling for their induction. Defined stimulation/inhibition of the two TGFbeta branches appeared to control early fate decisions in accordance with these downstream transcriptional effects. Our results therefore help to better understand how pluripotency is mediated at the transcriptional level.