Previous investigations of the core gene regulatory circuitry that controls the pluripotency of embryonic stem (ES) cells have largely focused on the roles of transcription, chromatin and non-coding RNA regulators. Alternative splicing represents a widely acting mode of gene regulation, yet its role in regulating ES-cell pluripotency and differentiation is poorly understood. Here we identify the muscleblind-like RNA binding proteins, MBNL1 and MBNL2, as conserved and direct negative regulators of a large program of cassette exon alternative splicing events that are differentially regulated between ES cells and other cell types. Knockdown of MBNL proteins in differentiated cells causes switching to an ES-cell-like alternative splicing pattern for approximately half of these events, whereas overexpression of MBNL proteins in ES cells promotes differentiated-cell-like alternative splicing patterns. Among the MBNL-regulated events is an ES-cell-specific alternative splicing switch in the forkhead family transcription factor FOXP1 that controls pluripotency. Consistent with a central and negative regulatory role for MBNL proteins in pluripotency, their knockdown significantly enhances the expression of key pluripotency genes and the formation of induced pluripotent stem cells during somatic cell reprogramming.