Embryonic stem (ES) cells are derived from blastocyst-stage embryos and are thought to be functionally equivalent to the inner cell mass, which lacks the ability to produce all extraembryonic tissues. Here we identify a rare transient cell population within mouse ES and induced pluripotent stem (iPS) cell cultures that expresses high levels of transcripts found in two-cell (2C) embryos in which the blastomeres are totipotent. We genetically tagged these 2C-like ES cells and show that they lack the inner cell mass pluripotency proteins Oct4 (also known as Pou5f1), Sox2 and Nanog, and have acquired the ability to contribute to both embryonic and extraembryonic tissues. We show that nearly all ES cells cycle in and out of this privileged state, which is partially controlled by histone-modifying enzymes. Transcriptome sequencing and bioinformatic analyses showed that many 2C transcripts are initiated from long terminal repeats derived from endogenous retroviruses, suggesting this foreign sequence has helped to drive cell-fate regulation in placental mammals.

Retrotransposons encompass half of the human genome and contribute to the formation of heterochromatin, which provides nuclear structure and regulates gene expression. Here, we asked if the human silencing hub (HUSH) complex is necessary to silence retrotransposons and whether it collaborates with TRIM28 and the chromatin remodeler ATRX at specific genomic loci. We show that the HUSH complex contributes to de novo repression and DNA methylation of an SVA retrotransposon reporter. By using naïve versus primed mouse pluripotent stem cells, we reveal a critical role for the HUSH complex in naïve cells, implicating it in programming epigenetic marks in development. Although the HUSH component FAM208A binds to endogenous retroviruses (ERVs) and long interspersed element-1s (LINE-1s or L1s), it is mainly required to repress evolutionarily young L1s (mouse-specific lineages <5 million years old). TRIM28, in contrast, is necessary to repress both ERVs and young L1s. Genes co-repressed by TRIM28 and FAM208A are evolutionarily young, or exhibit tissue-specific expression, are enriched in young L1s, and display evidence for regulation through LTR promoters. Finally, we demonstrate that the HUSH complex is also required to repress L1 elements in human cells. Overall, these data indicate that the HUSH complex and TRIM28 co-repress young retrotransposons and new genes rewired by retrotransposon noncoding DNA.

TRIM28 is critical for the silencing of endogenous retroviruses (ERVs) in embryonic stem (ES) cells. Here, we reveal that an essential impact of this process is the protection of cellular gene expression in early embryos from perturbation by cis-acting activators contained within these retroelements. In TRIM28-depleted ES cells, repressive chromatin marks at ERVs are replaced by histone modifications typical of active enhancers, stimulating transcription of nearby cellular genes, notably those harboring bivalent promoters. Correspondingly, ERV-derived sequences can repress or enhance expression from an adjacent promoter in transgenic embryos depending on their TRIM28 sensitivity in ES cells. TRIM28-mediated control of ERVs is therefore crucial not just to prevent retrotransposition, but more broadly to safeguard the transcriptional dynamics of early embryos.