Sex determining region Y-box 2 (Sox2), a member of the SoxB1 transcription factor family, is an important transcriptional regulator in pluripotent stem cells (PSCs). Together with octamer-binding transcription factor 4 and Nanog, they co-operatively control gene expression in PSCs and maintain their pluripotency. Furthermore, Sox2 plays an essential role in somatic cell reprogramming, reversing the epigenetic configuration of differentiated cells back to a pluripotent embryonic state. In addition to its role in regulation of pluripotency, Sox2 is also a critical factor for directing the differentiation of PSCs to neural progenitors and for maintaining the properties of neural progenitor stem cells. Here, we review recent findings concerning the involvement of Sox2 in pluripotency, somatic cell reprogramming and neural differentiation as well as the molecular mechanisms underlying these roles.