SUMMARY The Polycomb Repressive Complex 2 (PRC2) methylates lysine 27 of histone H3 (H3K27) through its catalytic subunit Ezh2. PRC2-mediated di- and tri-methylation (H3K27me2/me3) have been interchangeably associated with gene repression. However, it remains unclear whether these two degrees of H3K27 methylation have different functions. In this study, we have generated isogenic mouse embryonic stem cells (ESCs) with a modified H3K27me2/H3K27me3 ratio. Our findings document dynamic developmental control in the genomic distribution of H3K27me2 and H3K27me3 at regulatory regions in ESCs. They also reveal that modifying the ratio of H3K27me2 and H3K27me3 is sufficient for the acquisition and repression of defined cell lineage transcriptional programs and phenotypes, along with influencing induction of the ESC ground state.