Mouse embryonic stem cells (ESCs) proliferate with rapid cell cycle kinetics but without loss of pluripotency. The histone methyltransferase Dot1L is responsible for methylation of histone H3 at lysine 79 (H3K79me). We investigated whether ESCs require Dot1L for proper stem cell behavior. ESCs deficient in Dot1L tolerate a nearly complete loss of H3K79 methylation without a substantial impact on proliferation or morphology. However, shortly after differentiation is induced, Dot1L-deficient cells cease proliferating and arrest in G2/M-phase of the cell cycle, with increased levels of aneuploidy. In addition, many aberrant mitotic spindles occur in Dot1L-deficient cells. Surprisingly, these mitotic and cell cycle defects fail to trigger apoptosis, indicating that mouse ESCs lack stringent cell cycle checkpoint control during initial stages of differentiation. Transcriptome analysis indicates that Dot1L deficiency causes the misregulation of a select set of genes, including many with known roles in cell cycle control and cellular proliferation as well as markers of endoderm differentiation. The data indicate a requirement for Dot1L function for early stages of ESC differentiation where Dot1L is necessary for faithful execution of mitosis and proper transcription of many genes throughout the genome.