Polycomb group (PcG) RING finger protein 5 (PCGF5) is a core component of the so‐called Polycomb repressive complex 1.5 (PRC1.5), which is involved in epigenetic transcriptional repression. To explore the developmental function of Pcgf5, we generated Pcgf5 knockout (Pcgf5−/−) mouse embryonic stem cell (mESC) lines with the help of CRISPR/Cas9 technology. We subjected the Pcgf5−/− and wild‐type (WT) mESCs to a differentiation protocol toward mesodermal‐cardiac cell types as aggregated embryoid bodies (EBs) and we found that knockout of Pcgf5 delayed the generation of the three germ layers, especially the ectoderm. Further, disruption of Pcgf5 impacted the epithelial‐mesenchymal transition during EB morphogenesis and differentially affected the gene expression of essential developmental signaling pathways such as Nodal and Wnt. Finally, we also unveiled that loss of Pcgf5 induced the repression of genes involved in the Notch pathway, which may explain the enhancement of cardiomyocyte maturation and the dampening of ectodermal‐neural differentiation observed in the Pcgf5−/− EBs.