Mouse embryonic stem cells (mESCs), in addition to differentiating into the three germ layers, can reverse typical developmental trajectories, as exemplified by their ability to de-differentiate into 2-cell-like cells (2CLCs) that resemble the mammalian embryo during zygotic genome activation (ZGA). This unique property offers the opportunity to elucidate the molecular principles that govern the pre-implantation stages of mammalian development. Here, we dissect the functions of the chromatin repressor EHMT2, a candidate antagonist of the mESC-to-2CLC transition, by leveraging a multipurpose allele for acute protein depletion and efficient immunoprecipitation. Our experiments revealed distinct principles of EHMT2-mediated gene repression in mESCs based on specific chromatin binding patterns and protein co-factors. Most notably, EHMT2 directly represses large clusters of co-regulated gene loci that comprise a significant fraction of the 2CLC-specific transcriptome by initiating H3K9me2 spreading from distal LINE-1 elements. EHMT2 counteracts the recruitment of the activator DPPA2/4 to promoter-proximal endogenous retroviral elements (ERVs) at 2CLC genes. EHMT2 depletion enhances the expression of ZGA-associated transcripts in 2CLCs and synergizes with spliceosome inhibition and retinoic acid signaling to facilitate the mESC-to-2CLC transition. In contrast to ZGA-associated genes, the repression of germ layer-associated transcripts by EHMT2 occurs outside of gene clusters, in collaboration with ZFP462, and involves binding to non-repetitive candidate enhancers. Our observations provide novel mechanistic insight into how pluripotent cells achieve attenuation of their bidirectional differentiation potential and reveal unique transcriptional features of murine totipotent cells.