DNA methyltransferases and Ten-Eleven Translocation (TET) proteins regulate the DNA methylation and demethylation cycles during mouse embryonic development. Although DNMT1 mainly plays a role in the maintenance of DNA methylation after DNA replication, it is also reported to possess de novo methyltransferase capacity. However, its physiological significance remains unclear. Here, we demonstrate that full-length DNMT1 (FL) and a mutant lacking the N-terminus necessary for its maintenance activity (602) confer the differentiation potential of mouse Dnmt1, Dnmt3a, and Dnmt3b (Dnmts-TKO) embryonic stem cells (ESCs). Both FL and 602 inhibit the spontaneous differentiation of Dnmts-TKO ESCs in the undifferentiated state. Dnmts-TKO ESCs showed loss of DNA methylation and de-repression of primitive endoderm-related genes, but these defects were partially restored in Dnmts-TKO + FL and Dnmts-TKO + 602 ESCs. Upon differentiation, Dnmts-TKO + FL ESCs show increased 5mC and 5hmC levels across chromosomes, including pericentromeric regions. In contrast, Dnmts-TKO + 602 ESCs didn't accumulate 5mC, and sister chromatids showed 5hmC asynchronously. Furthermore, in comparison with DNMT1_602, DNMT1_FL effectively promoted commitment to the epiblast-like cells and beyond, driving cell-autonomous mesendodermal and germline differentiation through embryoid body-based methods. With precise target selectivity achieved by its N-terminal region, DNMT1 may play a role in gene regulation leading to germline development.