In regular culture conditions with leukemia inhibitory factor (LIF), the majority of mouse embryonic stem cells (mESCs) are maintained in a self-renewal stage; very few mESCs have differentiated morphology. When LIF is withdrawn, mESCs tend to differentiate; this differentiation process can be enhanced by the introduction of exogenous fibroblast growth factor (FGF). Here, we show that even in the presence of exogenous FGF1, mESCs can maintain self-renewal and expression of pluripotency markers in the presence of LIF. To elucidate the mechanism in which LIF dominates over the FGF1, extracellular signal-regulated kinase 1/2 (Erk1/2) signaling of mESCs cultured in a medium containing FGF1 or LIF/FGF1 was examined. The results demonstrate that Erk1/2 was activated by FGF1 in the absence of LIF; however, the FGF1-induced Erk1/2 phosphorylation was suppressed when LIF was introduced. Moreover, FGF1-Erk1/2 downregulation was inhibited by a signal transducer and activator of the transcription 3 (Stat3) inhibitor WP1066, suggesting that LIF-induced Stat3 activation plays an important role in the FGF1-Erk1/2 inhibition in mESCs. We further demonstrate that the binding affinity of phospho-Erk1/2 and Sprouty2 was increased via Stat3 activation. Binding of phospho-Erk1/2 and Sprouty2 blocks the activation of Erk1/2 signaling, thus inhibiting the downstream differentiation process in mESCs. Our findings demonstrate, for the first time, that LIF-induced Stat3 phosphorylation plays an important role in promoting the binding of phospho-Erk1/2 and Sprouty2, and thus inhibiting FGF-induced differentiation.