Pluripotent embryonic stem cells (ESCs) can develop into any cell type in the body. Yet, the regulatory mechanisms that govern cell fate decisions during embryogenesis remain largely unknown. We now demonstrate that mouse ESCs (mESCs) display large natural variations in mitochondrial reactive oxygen species (mitoROS) levels that individualize their nuclear redox state, H3K4me3 landscape, and cell fate. While mESCs with high mitoROS levels (mitoROS(HIGH)) differentiate toward mesendoderm and form the primitive streak during gastrulation, mESCs, which generate less ROS, choose the alternative neuroectodermal fate. Temporal studies demonstrated that mesendodermal (ME) specification of mitoROS(HIGH) mESCs is mediated by a Nrf2-controlled switch in the nuclear redox state, triggered by the accumulation of redox-sensitive H3K4me3 marks, and executed by a hitherto unknown ROS-dependent activation process of the Wnt signaling pathway. In summary, our study explains how ESC heterogeneity is generated and used by individual cells to decide between distinct cellular fates.