Autophagy is a conserved cytoprotective process, aberrations in which lead to numerous degenerative disorders. While the cytoplasmic components of autophagy have been extensively studied, the epigenetic regulation of autophagy genes, especially in stem cells, is less understood. Deciphering the epigenetic regulation of autophagy genes becomes increasingly relevant given the therapeutic benefits of small‐molecule epigenetic inhibitors in novel treatment modalities. We observe that, during retinoic acid‐mediated differentiation of mouse embryonic stem cells (mESCs), autophagy is induced, and identify the Polycomb group histone methyl transferase EZH2 as a regulator of this process. In mESCs, EZH2 represses several autophagy genes, including the autophagy regulator DNA damage‐regulated autophagy modulator protein 1 (Dram1). EZH2 facilitates the formation of a bivalent chromatin domain at the Dram1 promoter, allowing gene expression and autophagy induction during differentiation while retaining the repressive H3K27me3 mark. EZH2 inhibition leads to loss of the bivalent domain, with consequent ‘hyper‐expression’ of Dram1, accompanied by extensive cell death. This study shows that Polycomb group proteins help maintain a balance between autophagy and cell death during stem cell differentiation, in part, by regulating the expression of the Dram1 gene.