Klf5 establishes bi-potential cell fate by dual regulation of ICM and TE specification genes

Early blastomeres of mouse preimplantation embryos exhibit bi-potential cell fate, capable of generating both embryonic and extra-embryonic lineages in blastocysts. Here we identify three major two-cell-stage (2C)-specific endogenous retroviruses (ERVs) as the molecular hallmark of this bi-potential plasticity. Using the long terminal repeats (LTRs) of all three 2C-specific ERVs, we identify Krüppel-like factor 5 (Klf5) as their major upstream regulator. Klf5 is essential for bi-potential cell fate; a single Klf5-overexpressing embryonic stem cell (ESC) generates terminally differentiated embryonic and extra-embryonic lineages in chimeric embryos, and Klf5 directly induces inner cell mass (ICM) and trophectoderm (TE) specification genes. Intriguingly, Klf5 and Klf4 act redundantly during ICM specification, whereas Klf5 deficiency alone impairs TE specification. Klf5 is regulated by multiple 2C-specific transcription factors, particularly Dux, and the Dux/Klf5 axis is evolutionarily conserved. The 2C-specific transcription program converges on Klf5 to establish bi-potential cell fate, enabling a cell state with dual activation of ICM and TE genes.