SOX2 is a key regulator of multiple types of stem cells, especially embryonic stem cells (ESCs) and neural progenitor cells (NPCs).Understanding the mechanism underlying the function of SOX2 is of great importance for realizing the full potential of ESCs and NPCs. Here, through genome-wide comparative studies, we show that SOX2 executes its distinct functions in human ESCs (hESCs) and hESC-derived NPCs (hNPCs) through cell type-and stage-dependent transcription programs. Importantly, SOX2 suppresses non-neural lineages in hESCs and regulates neurogenesis from hNPCs by inhibiting canonical Wnt signaling. In hESCs, SOX2 achieves such inhibition by direct transcriptional regulation of important Wnt signaling modulators, WLS and SFRP2. Moreover, SOX2 ensures pluripotent epigenetic landscapes via interacting with histone variant H2A.Z and recruiting polycomb repressor complex 2 to poise developmental genes in hESCs. Together, our results advance our understanding of the mechanism by which cell type-specific transcription factors control lineage-specific gene expression programs and specify cell fate.