Induced pluripotency provides a tool to explore mechanisms underlying establishment, maintenance, and differentiation of naive pluripotent stem cells (nPSCs). Here, we report that self-renewal of nPSCs requires minimal Sox2 expression (Sox2-low). Sox2-low nPSCs do not show impaired neuroectoderm specification and differentiate efficiently in vitro into all embryonic germ lineages. Strikingly, upon the removal of self-renewing cues Sox2-low nPSCs differentiate into both embryonic and extraembryonic cell fates in vitro and in vivo. This differs from previous studies which only identified conditions that allowed cells to differentiate to one fate or the other. At the single-cell level self-renewing Sox2-low nPSCs exhibit a naive molecular signature. However, they display a nearer trophoblast identity than controls and decreased ability of Oct4 to bind naïve-associated regulatory sequences. In sum, this work defines wild-type levels of Sox2 as a restrictor of developmental potential and suggests perturbation of naive network as a mechanism to increase cell plasticity.