The canonical Wnt pathway is critical for embryonic stem cell (ESC) pluripotency and aberrant control of β-catenin leads to failure of exit from pluripotency and lineage commitments. Hence, maintaining the appropriate level of β-catenin is important for the decision to commit to the appropriate lineage. However, how β-catenin links to core transcription factors in ESCs remains elusive. C-terminal-binding protein (CtBP) in Drosophila is essential for Wnt-mediated target gene expression. In addition, Ctbp acts as an antagonist of β-catenin/TCF activation in mammals. Recently, Ctbp2, a core Oct4-binding protein in ESCs, has been reported to play a key role in ESC pluripotency. However, the significance of the connection between Ctbp2 and β-catenin with regard to ESC pluripotency remains elusive. Here, we demonstrate that C-terminal-binding protein 2 (Ctbp2) associates with major components of the β-catenin destruction complex and limits the accessibility of β-catenin to core transcription factors in undifferentiated ESCs. Ctbp2 knockdown leads to stabilization of β-catenin, which then interacts with core pluripotency-maintaining factors that are occupied by Ctbp2, leading to incomplete exit from pluripotency. These findings suggest a suppressive function for Ctbp2 in reducing the protein level of β-catenin, along with priming its position on core pluripotency genes to hinder β-catenin deposition, which is central to commitment to the appropriate lineage.