ABSTRACT
Maintenance of stemness is tightly linked to cell cycle regulation through protein phosphorylation by cyclin-dependent kinases (CDKs). However, how this process is reversed during differentiation is unknown. We report here that exit from stemness and differentiation of pluripotent cells along the neural lineage are controlled by CDC14, a CDK-counteracting phosphatase whose function in mammals remains obscure. Lack of the two CDC14 family members, CDC14A and CDC14B, results in deficient development of the neural system in the mouse and impairs neural differentiation from embryonic stem cells (ESCs). Mechanistically, CDC14 directly dephosphorylates specific proline-directed Ser/Thr residues of undifferentiated embryonic transcription Factor 1 (UTF1) during the exit from stemness, triggering its proteasome-dependent degradation. Multiomic single-cell analysis of transcription and chromatin accessibility in differentiating ESCs suggests that increased UTF1 levels in the absence of CDC14 prevent the proper firing of bivalent promoters required for differentiation. CDC14 phosphatases are dispensable for mitotic exit, suggesting that CDC14 phosphatases have evolved to control stemness rather than cell cycle exit and establish the CDK-CDC14 axis as a critical molecular switch for linking cell cycle regulation and self-renewal.