Polycomb repressive complexes (PRCs) are essential in mouse gastrulation and specify neural ectoderm in human embryonic stem cells (hESCs), but the underlying molecular basis remains unclear. Here in this study, by employing an array of different approaches, such as gene knock-out, RNA-seq, ChIP-seq, et al., we uncover that EZH2, an important PRC factor, specifies the normal neural fate decision through repressing the competing meso/endoderm program. EZH2 hESCs show an aberrant re-activation of meso/endoderm genes during neural induction. At the molecular level, EZH2 represses meso/endoderm genes while SOX2 activates the neural genes to coordinately specify the normal neural fate. Moreover, EZH2 also supports the proliferation of human neural progenitor cells (NPCs) through repressing the aberrant expression of meso/endoderm program during culture. Together, our findings uncover the coordination of epigenetic regulators such as EZH2 and lineage factors like SOX2 in normal neural fate decision.