Embryonic stem cells (ES cells) are derived from the inner cell mass (ICM) of blastocysts. ES cells can divide and produce identical copies of them over and over again (self-renewal) in vitro for a long time, and retain the capability of differentiating into all cell types when induced by appropriate signals. Their capability of multilineage differentiation might be exploited for cell-based therapies. Therefore, ES cells have a broad prospect in many clinical applications. To achieve success in the clinical applications, we have to understand how ES cells propagate and differentiate into specific cell types. The cytokine LIF can sustain the self-renewal of certain mouse ES cells (mES cells) through activation of the signal transduction pathway LIF/gp130/ STAT3. In this pathway the transcription factor STAT3 is a crucial factor. Furthermore, Oct-3/4 plays a very important role in maintaining the ES cell pluripotency. Oct-3/4 regulates embryo development through its co-factor Sox2 and Rox-1. Recently nanog, a new homeodomain gene, was found and it has been shown to be crucial for the renewal and pluripotency of ES cells. Three other signals BMP, Wnt and ERK also can influence differentiation and propagation of ES cells. This review article summarizes recent progress in this area, mainly focusing on the LIF signaling pathway and the transcription factors Oct-3/4 and Nanog. Although it is still unclear how these components cooperate, a model is presented here to provide a design for solving this problem.