Polycomb group proteins are essential regulators of cell fate decisions during embryogenesis. In mammals, at least five different Cbx proteins (Cbx2, Cbx4, Cbx6, Cbx7, and Cbx8) are known to associate with the core Polycomb repressive complex 1 (PRC1). Here we show that pluripotency and differentiation of mouse embryonic stem cells (ESCs) is regulated by different Cbx-associated PRC1 complexes with unique functions. Maintenance of pluripotency primarily depends on Cbx7, while lineage commitment is orchestrated by Cbx2 and Cbx4. At the molecular level, we have uncovered a Polycomb autoregulatory loop in which Cbx7 represses the expression of prodifferentiation Cbx proteins, thereby maintaining the pluripotent state. We additionally show that the occupancy of Cbx7 on promoters is completely dependent on PRC2 activity but only partially dependent on a functional PRC1 complex. Thus, Cbx proteins confer distinct target selectivity to the PRC1 complex, achieving a balance between the self-renewal and the differentiation of ESCs.