The Polycomb group (PcG) encodes an evolutionarily conserved set of chromatin-modifying proteins that are thought to maintain cellular transcriptional memory by stably silencing gene expression. In mouse embryos that are mutated for the PcG protein Eed, X-chromosome inactivation (XCI) is not stably maintained in extra-embryonic tissues. Eed is a component of a histone-methyltransferase complex that is thought to contribute to stable silencing in undifferentiated cells due to its enrichment on the inactive X-chromosome in cells of the early mouse embryo and in stem cells of the extra-embryonic trophectoderm lineage^,,,,,. Here, we demonstrate that the inactive X-chromosome in Eed^−/− trophoblast stem cells and in cells of the trophectoderm-derived extra-embryonic ectoderm in Eed^−/− embryos remain transcriptionally silent, despite lacking the PcG-mediated histone modifications that normally characterize the facultative heterochromatin of the inactive X-chromosome. Whereas undifferentiated Eed^−/− trophoblast stem cells maintained XCI, reactivation of the inactive X-chromosome occurred when these cells were differentiated. These results indicate that PcG complexes are not necessary to maintain transcriptional silencing of the inactive X-chromosome in undifferentiated stem cells. Instead, PcG proteins seem to propagate cellular memory by preventing transcriptional activation of facultative heterochromatin during differentiation.