Transcription factor CP2-like protein 1 (Tfcp2l1), a naïve pluripotency transcription factor, is expressed in both early embryonic and adult tissues, where it enforces pluripotency of embryonic stem cells (ESCs) and stemness features of cancer cells, respectively. However, the detailed molecular pathways by which Tfcp2l1 is regulated in early embryonic development and cancer cells remain unknown. Here, we identified the pseudophosphatase dual specificity phosphatase 27 (Dusp27), also known as serine/threonine/tyrosine-interacting like-2, as a novel Tfcp2l1-interacting protein through a sterile alpha motif-like domain in the C-terminus of Tfcp2l1 in murine ESCs. The interaction between Dusp27 and Tfcp2l1 was dependent on the cell cycle status and increased during mitosis. Expression of <i>Dusp27</i> was upregulated during naïve pluripotency and repressed during spontaneous differentiation of murine ESCs. Ectopic expression of <i>Dusp27</i> enhanced the transcriptional activity of Tfcp2l1 and promoted features associated with the naïve pluripotent state, while suppressing meso-endodermal lineage differentiation. The present study demonstrates that Dusp27 is a novel positive regulator of Tfcp2l1 through a physical interaction and thereby fine-tunes the pluripotency status and meso-endodermal differentiation of murine ESCs.