mRNA alternative polyadenylation (APA) plays a critical role in post-transcriptional gene control and is highly regulated during development and disease. However, the regulatory mechanisms and functional consequences of APA remain poorly understood. Here, we show that an mRNA 3' processing factor, Fip1, is essential for embryonic stem cell (ESC) self-renewal and somatic cell reprogramming. Fip1 promotes stem cell maintenance, in part, by activating the ESC-specific APA profiles to ensure the optimal expression of a specific set of genes, including critical self-renewal factors. Fip1 expression and the Fip1-dependent APA program change during ESC differentiation and are restored to an ESC-like state during somatic reprogramming. Mechanistically, we provide evidence that the specificity of Fip1-mediated APA regulation depends on multiple factors, including Fip1-RNA interactions and the distance between APA sites. Together, our data highlight the role for post-transcriptional control in stem cell self-renewal, provide mechanistic insight on APA regulation in development, and establish an important function for APA in cell fate specification.