Cell fate determination is an intricate process which is orchestrated by multiple regulatory layers including signal pathways, transcriptional factors, epigenetic modifications, and metabolic rewiring. Among the sophisticated epigenetic modulations, the repressive mark H3K27me3, deposited by PRC2 (polycomb repressive complex 2) and removed by demethylase KDM6, plays a pivotal role in mediating the cellular identity transition through its dynamic and precise alterations. Herein, we overview and discuss how H3K27me3 and its modifiers regulate pluripotency maintenance and early lineage differentiation. We primarily highlight the following four aspects: 1) the two subcomplexes PRC2.1 and PRC2.2 and the distribution of genomic H3K27 methylation; 2) PRC2 as a critical regulator in pluripotency maintenance and exit; 3) the emerging role of the eraser KDM6 in early differentiation; 4) newly identified additional factors influencing H3K27me3. We present a comprehensive insight into the molecular principles of the dynamic regulation of H3K27me3, as well as how this epigenetic mark participates in pluripotent stem cell-centered cell fate determination.