UBR5 E3 ligase has been associated with cancer susceptibility and neuronal integrity, with functions in chromatin regulation and proteostasis. However, the functions of ubr5 within animals remain unclear due to lethality in both mammals and flies when disrupted. Using Caenorhabditis elegans, we show that UBR-5 E3 ligase is required for timely exit of stem fate and complete transition into multiple cell type descendants in an ectodermal blast lineage. Animals lacking intact UBR-5 function simultaneously exhibit both stem fate and differentiated fate in the same descendant cells. A functional screen of UBR-5 physical interactors allowed us to identify the UBE2D2/3 E2 conjugase LET-70 working with UBR-5 to exit stem fate. Strikingly, we revealed that another UBR-5 physical interactor, namely the nuclear poly(A)-binding protein PABPN1 ortholog PABP-2, worked antagonistically to UBR-5 and LET-70. Lowering pabp-2 levels restored normal transition of cell state out of stemness and promoted normal cell fusion when either ubr-5 or let-70 UBE2D function was compromised. The UBR-5-LET-70 and PABP-2 switch works independently of the stem pool size determined by pluripotency factors like lin-28. UBR-5 limits PABP-2 protein and reverses the PABP-2-dependent gene expression program including developmental, proteostasis, and innate immunity genes. Loss of ubr-5 rescues the developmental stall when pabp-2 is compromised. Disruption of ubr-5 elevates PABP-2 levels and prolongs expression of ectodermal and muscle stem markers at the transition to adulthood. Additionally, ubr-5 mutants exhibit an extended period of motility during aging and suppress pabp-2-dependent early onset of immobility.