Dual specificity phosphatase 7 (DUSP7) is a protein belonging to a broad group of phosphatases that can dephosphorylate phosphoserine/phosphothreonine as well as phosphotyrosine residues within the same substrate. DUSP7 has been linked to the negative regulation of mitogen activated protein kinases (MAPK), and in particular to the regulation of extracellular signal-regulated kinases 1 and 2 (ERK1/2). MAPKs play an important role in embryonic development, where their duration, magnitude, and spatiotemporal activity must be strictly controlled by other proteins, among others by DUSPs. In this study, we focused on the effect of DUSP7 depletion on the in vitro differentiation of mouse embryonic stem (ES) cells. We showed that even though DUSP7 knock-out ES cells do retain some of their basic characteristics, when it comes to differentiation, they preferentially differentiate towards neural cells, while the formation of early cardiac mesoderm is repressed. Therefore, our data indicate that DUSP7 is necessary for the correct formation of neuroectoderm and cardiac mesoderm during the in vitro differentiation of ES cells.