Embryonic stem (ES) cells are derived from the inner cell mass of the blastocyst stage embryo and are characterized by self-renewal and pluripotency. Previous work has shown that Src-family tyrosine kinases display dynamic expression and activity changes during ES cell differentiation, suggesting distinct functions in the control of developmental fate. Here we used ES cells to test the hypothesis that c-Src and its closest phylogenetic relative, c-Yes, act in biological opposition despite their strong homology. Unlike c-Src, enforced expression of active c-Yes blocked ES cell differentiation to embryoid bodies by maintaining pluripotency gene expression. To explore the interplay of c-Src and c-Yes in ES cell differentiation, we engineered c-Src and c-Yes mutants that are resistant to A-419259, a potent pyrrolopyrimidine inhibitor of the Src kinase family. Previous studies have shown that A-419259 treatment blocks all Src-family kinase activity in ES cells, preventing differentiation while maintaining pluripotency. Expression of inhibitor-resistant c-Src but not c-Yes rescued the A-419259 differentiation block, resulting in a cell population with properties of both primitive ectoderm and endoderm. Remarkably, when inhibitor-resistant c-Src and c-Yes were expressed together in ES cells, c-Yes activity suppressed c-Src-mediated differentiation. These studies show that even closely related kinases such as c-Src and c-Yes have unique and opposing functions in the same cell type. Selective agonists or inhibitors of c-Src versus c-Yes activity may allow more precise pharmacological manipulation of ES cell fate and have broader applications in other biological systems that express multiple Src family members such as tumor cells.