Complete information regarding transcriptional and posttranscriptional gene regulation in stem cells is necessary to understand the regulation of self-renewal and differentiation. Alternative splicing is a prevalent mode of posttranscriptional regulation, and occurs in approximately one half of all mammalian genes. The frequency and functional impact of alternative splicing in stem cells are yet to be determined. In this study we combine computational and experimental methods to identify splice variants in embryonic and hematopoietic stem cells on a genome-wide scale. Using EST collections derived from stem cells, we detect alternative splicing in >1,000 genes. Systematic RT-PCR and sequencing studies show confirmation of computational predictions at a level of 80%. We find that alternative splicing can modify multiple components of signaling pathways important for stem cell function. We also analyze the distribution of splice variants across different classes of genes. We find that tissue-specific genes have a higher tendency to undergo alternative splicing than ubiquitously expressed genes. Furthermore, the patterns of alternative splicing are only weakly conserved between orthologous genes in human and mouse. Our studies reveal extensive modification of the stem cell molecular repertoire by alternative splicing and provide insights into its overall role as a mechanism of generating genomic diversity.