The Prep1 (Pknox1) homeodomain transcription factor is essential at multiple stages of embryo development. In the E11.5 embryo trunk, we previously estimated that Prep1 binds about 3,300 genomic sites at a highly specific decameric consensus sequence, mainly governing basal cellular functions. We now show that in embryonic stem (ES) cells Prep1 binding pattern only partly overlaps that of the embryo trunk, with about 2,000 novel sites. Moreover, in ES cells Prep1 still binds mostly to promoters, as in total embryo trunk but, among the peaks bound exclusively in ES cells, the percentage of enhancers was three-fold higher. RNA-seq identifies about 1800 genes down-regulated in Prep1-/- ES cells which belong to gene ontology categories not enriched in the E11.5 Prep1i/i differentiated embryo, including in particular essential components of the Wnt and Fgf pathways. These data agree with aberrant Wnt and Fgf expression levels in the Prep1-/- ES cells with a deficient embryoid bodies (EBs) formation and differentiation. Re-establishment of the Prep1 level rescues the phenotype.