The mechanisms of transcriptional regulation underlying human primordial germ cell (PGC) differentiation are largely unknown. The transcriptional repressor Prdm1/Blimp-1 is known to play a critical role in controlling germ cell specification in mice. Here, we show that PRDM1 is expressed in developing human gonads and contributes to the determination of germline versus neural fate in early development. We show that knockdown of PRDM1 in human embryonic stem cells (hESCs) impairs germline potential and upregulates neural genes. Conversely, ectopic expression of PRDM1 in hESCs promotes the generation of cells that exhibit phenotypic and transcriptomic features of early PGCs. Furthermore, PRDM1 suppresses transcription of SOX2. Overexpression of SOX2 in hESCs under conditions favoring germline differentiation skews cell fate from the germline to the neural lineage. Collectively, our results demonstrate that PRDM1 serves as a molecular switch to modulate the divergence of neural or germline fates through repression of SOX2 during human development.