Quiescence in stem cells is traditionally considered as a state of inactive dormancy or with poised potential. Naive mouse embryonic stem cells (ESCs) can enter quiescence spontaneously or upon inhibition of MYC or fatty acid oxidation, mimicking embryonic diapause in vivo. The molecular underpinning and developmental potential of quiescent ESCs (qESCs) are relatively unexplored. Here we show that qESCs possess an expanded or unrestricted cell fate, capable of generating both embryonic and extraembryonic cell types (e.g., trophoblast stem cells). These cells have a divergent metabolic landscape comparing to the cycling ESCs, with a notable decrease of the one-carbon metabolite S-adenosylmethionine. The metabolic changes are accompanied by a global reduction of H3K27me3, an increase of chromatin accessibility, as well as the de-repression of endogenous retrovirus MERVL and trophoblast master regulators. Depletion of methionine adenosyltransferase Mat2a or deletion of Eed in the polycomb repressive complex 2 results in removal of the developmental constraints towards the extraembryonic lineages. Our findings suggest that quiescent ESCs are not dormant but rather undergo an active transition towards an unrestricted cell fate.