The expression of the transcription factors Oct4, Sox2, and Nanog is commonly associated with pluripotency of mouse embryonic stem (ES) cells. However, recent observations suggest that ES cell populations are heterogeneous with respect to the expression of Nanog and that individual ES cells reversibly change their Nanog expression level. Furthermore, it has been shown that cells exhibiting a low Nanog level are more likely to undergo differentiation. Applying a novel mathematical transcription factor network model we explore mechanisms and feedback regulations to describe the observed variation of the Nanog levels in mouse ES cells. In particular we show that these variations can occur under different assumptions yielding similar experimental characteristics. Based on model predictions we propose experimental strategies to distinguish between these explanations. Concluding from our results we argue that the heterogeneity with respect to the Nanog concentrations is most likely a functional element to control the differentiation propensity of an ES cell population. Furthermore, we provide a conceptual framework that consistently explains Nanog variability and a potential "gate-keeper" function of Nanog expression with respect to the control of ES cell differentiation.