Transcription factor Krüppel-like factor 5 (Klf5) plays important roles in the formation of the inner cell mass (ICM) and the trophectoderm during embryogenesis, as well as the self-renewal and the differentiation of mouse embryonic stem cells (ESCs). Acetylation of KLF5 has been shown to reverse the transcriptional activity of KLF5 in human epidermal cells and prostate cancer cells. Whether Klf5 acetylation contributes to the lineage specification in the blastocyst and pluripotency maintenance in ESCs remains unexplored. Here, we showed the ubiquitous expression of acetylated Klf5 in the ICM and the trophectoderm, ruling out the possibility that differential acetylation status of Klf5 leads to the lineage specification in the blastocyst. We found that K358Q mutation, mimicking acetylation, enhances the transcriptional activity of Klf5 for pluripotency genes in ESCs, and that K358Q Klf5 is more potent in pluripotency maintenance and in somatic cell reprogramming, compared to K358R Klf5. In ESCs, Klf5 acetylation, stimulated by TGF-β signaling, is involved in enhancing Sox2 expression. Moreover, upon ESC differentiation, acetylation of Klf5 facilitates the suppression of many differentiation genes, except for that K358Q Klf5 activates Cdx2, promoting trophectodermal differentiation. In summary, our results revealed the regulatory functions of Klf5 acetylation in ESC self-renewal and differentiation.