Dosage compensation is the mechanism that balances gene expression levels between males and females as well as between the X chromosome and autosomes. In mammals, loss of pluripotency and differentiation are closely linked with the onset of dosage compensation. Pluripotency factors negatively regulate Xist (the non-coding RNA that triggers X chromosome inactivation) and positively regulate Tsix, a repressor of Xist, to inhibit dosage compensation. In addition, X chromosome dose also regulates exit from the pluripotent state. A double dose of X chromosomes in undifferentiated female cells inhibits the MAPK and Gsk3 signaling pathways and activates the Akt pathway, thereby blocking differentiation. Here we review our recent report, which showed that the onset of dosage compensation is also linked to the loss of pluripotency in C. elegans. We discuss these findings in light of what is known about pluripotency and differentiation in this organism.