Reversible epiblast regionalization determines differentiation potential of human pluripotent stem cells.
Although human pluripotent stem cells (hPSCs) can generate all tissues of the body, hPSCs in vitro frequently exhibit differentiation biases or failure that pose substantial challenges for disease modeling and regenerative medicine. The origins of these biases remain incompletely understood and extend beyond reprogramming artifacts. Here we show that loss of default neural differentiation capacity and failure to form brain organoids are linked to erosion of bivalent chromatin marks at developmental gene loci, independent of DNA methylation, driving acquisition of a posterior epiblast-like state and premature developmental gene expression. We develop a chemical chromatin restoration (CHR) approach that rescues this differentiation bias by reinstating transcriptional programs and chromatin landscapes characteristic of the competent anterior epiblast-like state, restoring broad differentiation potential. These findings establish locus-specific patterns of repressive and activating histone post-translational modifications as a tractable and experimentally targetable determinant of hPSC fate competency, and offer an effective route to rescue differentiation-compromised hPSC lines for applications in disease modeling and regenerative medicine.