Hbxip, also named Lamtor5, has been well characterized as a transcriptional coactivator in various cancers. However, the role of Hbxip in normal development remains unexplored. Here, we demonstrated that homozygous knockout of Hbxip leads to embryonic lethality, with retarded growth around E7.5. Using Hbxip knockout embryonic stem cells (ESCs), we showed that depletion of Hbxip compromises the self-renewal of ESCs, with reduced expression of pluripotency genes, reduced cell proliferation, and decreased colony forming capacity. In addition, Hbxip-/- ESCs are defective in differentiation, particularly ectodermal and mesodermal differentiation. Consistently, Hbxip-/- epiblast fails to differentiate properly, indicated by sustained expression of Oct4 in E8.5 Hbxip-/- epiblast. Mechanistically, in ESCs, Hbxip interacts with other components of the Ragulator complex, which is required for mTORC1 activation by amino acids. Importantly, ESCs depleted of Ragulator subunits, Lamtor3 or Lamtor4, display differentiation defects similar to those of Hbxip-/- ESCs. Moreover, Hbxip-/-, p14-/-, and p18-/- mice, lacking subunits of the Ragulator complex, also share similar phenotypes, embryonic lethality and retarded growth around E7-8. Thus, we conclude that Hbxip plays a pivotal role in the development and differentiation of the epiblast, as well as the self-renewal and differentiation of ESCs, through activating mTORC1 signaling.