Sox2 is a key factor for maintaining embryonic stem cell (ESS) pluripotency, but little is known about its posttranslational regulation. Here we present evidence that the precise level of Sox2 proteins in ESCs is regulated by a balanced methylation and phosphorylation switch. Set7 monomethylates Sox2 at K119, which inhibits Sox2 transcriptional activity and induces Sox2 ubiquitination and degradation. The E3 ligase WWP2 specifically interacts with K119-methylated Sox2 through its HECT domain to promote Sox2 ubiquitination. In contrast, AKT1 phosphorylates Sox2 at T118 and stabilizes Sox2 by antagonizing K119me by Set7 and vice versa. In mouse ESCs, AKT1 activity toward Sox2 is greater than that of Set7, leading to Sox2 stabilization and ESC maintenance. In early development, increased Set7 expression correlates with Sox2 downregulation and appropriate differentiation. Our study highlights the importance of a Sox2 methylation-phosphorylation switch in determining ESC fate.