Using global gene expression and proteomic analyses, we identified a molecular signature in human embryonic and induced pluripotent stem cells that suggested a central regulatory role for RNA splicing in self-renewal. Through genetic and biochemical approaches, we established reciprocal functional links between the master regulatory factor OCT4 and SFRS2, a member of the serine/arginine-rich family of splicing factors. SFRS2 regulates expression of two isoforms of the methyl-CpG-binding protein MBD2 that play opposing roles in human ESC and during the reprogramming of fibroblasts. Both the MBD2a isoform expressed in fibroblasts and the MBD2c isoform found in pluripotent cells bind OCT4 and NANOG promoters in human ESC, but only MBD2a interacts with NuRD chromatin remodeling factors. Members of the miR-301 and miR-302 families provide additional regulation by targeting SFRS2 and the somatic specific MBD2a isoform. These data are consistent with a model in which OCT4, SFRS2, and MBD2 participate in a positive feedback loop to regulate proteome diversity in support of self-renewal in pluripotent cells.