Abstract During embryonic development cells acquire identity at the same time as they are proliferating, implying that an intrinsic facet of cell fate choice requires coupling lineage decisions to rates of cell division. How is the cell cycle regulated to promote or suppress heterogeneity and differentiation? We explore this question combining time lapse imaging with single cell RNA-seq in the contexts of self-renewal, priming and differentiation of embryonic stem cells (ESCs) towards the Primitive Endoderm lineage (PrE). Since ESCs are derived from the Inner Cell Mass of the mammalian blastocyst, ESCs in standard culture conditions are transcriptionally heterogeneous containing subfractions that are primed for either of the two ICM lineages, Epiblast and PrE. These subfractions represent dynamic states that can readily interconvert in culture, and the PrE subfraction is functionally primed for endoderm differentiation. Here we find that differential regulation of cell cycle can tip the balance between these primed populations, such that naïve ESC culture conditions promote Epiblast-like expansion and PrE differentiation stimulates the selective proliferation of PrE-primed cells. In endoderm differentiation, we find that this change is accompanied by a counter-intuitive increase in G1 length that also appears replicated in vivo . While FGF/ERK signalling is a known key regulator of ESCs and PrE differentiation, we find it is not just responsible for ESCs heterogeneity, but also cell cycle synchronisation, required for the inheritance of similar cell cycles between sisters and cousins. Taken together, our results point to a tight relationship between transcriptional heterogeneity and cell cycle regulation in the context of lineage priming, with primed cell populations providing a pool of flexible cell types that can be expanded in a lineage-specific fashion while allowing plasticity during early determination.