Recent RNA-sequencing studies have shown remarkable complexity in the mammalian transcriptome. The ultimate impact of this complexity on the predicted proteomic output is less well defined. We have undertaken strand-specific RNA sequencing of multiple cellular RNA fractions (>20 Gb) to uncover the transcriptional complexity of human embryonic stem cells (hESCs). We have shown that human embryonic stem (ES) cells display a high degree of transcriptional diversity, with more than half of active genes generating RNAs that differ from conventional gene models. We found evidence that more than 1000 genes express long 5' and/or extended 3'UTRs, which was confirmed by "virtual Northern" analysis. Exhaustive sequencing of the membrane-polysome and cytosolic/untranslated fractions of hESCs was used to identify RNAs encoding peptides destined for secretion and the extracellular space and to demonstrate preferential selection of transcription complexity for translation in vitro. The impact of this newly defined complexity on known gene-centric network models such as the Plurinet and the cell surface signaling machinery in human ES cells revealed a significant expansion of known transcript isoforms at play, many predicting possible alternative functions based on sequence alterations within key functional domains.