Mouse embryonic stem (ES) cell cultures exhibit heterogeneity and recently are discovered to sporadically enter the 2-cell (2C)-embryo state, critical for ES potency. Zscan4 could mark the sporadic 2C-state of ES cells. However, factors that regulate the Zscan4(+)/2C state remain to be elucidated. We show that Tbx3 plays a novel role in regulation of Zscan4(+)/2C state. Tbx3 activates 2-cell genes including Zscan4 and Tcstv1/3, but not vise versa. Ectopic expression of Tbx3 results in telomere elongation, consistent with a role for Zscan4 in telomere lengthening. Mechanistically, Tbx3 decreases Dnmt3b and increases Tet2 protein levels, and reduces binding of Dnmt3b to subtelomeres, resulting in reduced DNA methylation and derepression of genes at subtelomeres, e.g. Zscan4. These data suggest that Tbx3 can activate Zscan4(+)/2C state by negative regulation of DNA methylation at repeated sequences, linking to telomere maintenance and self-renewal of ES cells.