AbstractMouse embryonic stem cells (mESCs) sporadically transition to a transient totipotent state that resembles blastomeres of the two‐cell (2C) embryo stage, which has been proposed to contribute to exceptional genomic stability, one of the key features of mESCs. However, the biological significance of the rare population of 2C‐like cells (2CLCs) in ESC cultures remains to be tested. Here we generated an inducible reporter cell system for specific elimination of 2CLCs from the ESC cultures to disrupt the equilibrium between ESCs and 2CLCs. We show that removing 2CLCs from the ESC cultures leads to dramatic accumulation of DNA damage, genomic mutations, and rearrangements, indicating impaired genomic instability. Furthermore, 2CLCs removal results in increased apoptosis and reduced proliferation of mESCs in both serum/LIF and 2i/LIF culture conditions. Unexpectedly, p53 deficiency results in defective response to DNA damage, leading to early accumulation of DNA damage, micronuclei, indicative of genomic instability, cell apoptosis, and reduced self‐renewal capacity of ESCs when devoid of 2CLCs in cultures. Together, our data reveal that transition to the privileged 2C‐like state is a major component of the intrinsic mechanisms that maintain the exceptional genomic stability of mESCs for long‐term self‐renewal.