Faithful execution of developmental programs relies on the acquisition of unique cell identities from pluripotent progenitors, a process governed by combinatorial inputs from numerous signaling cascades that ultimately dictate lineage-specific transcriptional outputs. Despite growing evidence that metabolism is integrated with many molecular networks, how pathways that control energy homeostasis may affect cell fate decisions is largely unknown. Here, we show that AMP-activated protein kinase (AMPK), a central metabolic regulator, plays critical roles in lineage specification. Although AMPK-deficient embryonic stem cells (ESCs) were normal in the pluripotent state, these cells displayed profound defects upon differentiation, failing to generate chimeric embryos and preferentially adopting an ectodermal fate at the expense of the endoderm during embryoid body (EB) formation. AMPK^−/− EBs exhibited reduced levels of Tfeb, a master transcriptional regulator of lysosomes, leading to diminished endolysosomal function. Remarkably, genetic loss of Tfeb also yielded endodermal defects, while AMPK-null ESCs overexpressing this transcription factor normalized their differential potential, revealing an intimate connection between Tfeb/lysosomes and germ layer specification. The compromised endolysosomal system resulting from AMPK or Tfeb inactivation blunted Wnt signaling, while up-regulating this pathway restored expression of endodermal markers. Collectively, these results uncover the AMPK pathway as a novel regulator of cell fate determination during differentiation.