Glycogen synthase kinase 3 (GSK3) plays a central role in diverse cellular processes. GSK3 has two mammalian isozymes, GSK3α and GSK3β, whose functions remain ill-defined because of a lack of inhibitors that can distinguish between the two highly homologous isozymes. Here, we show that GSK3α and GSK3β can be selectively inhibited in mouse embryonic stem cells (ESCs) using a chemical-genetic approach. Selective inhibition of GSK3β is sufficient to maintain mouse ESC self-renewal, whereas GSK3α inhibition promotes mouse ESC differentiation toward neural lineages. Genome-wide transcriptional analysis reveals that GSK3α and GSK3β have distinct sets of downstream targets. Furthermore, selective inhibition of individual GSK3 isozymes yields distinct phenotypes from gene deletion, highlighting the power of the chemical-genetic approach in dissecting kinase catalytic functions from the proteins scaffolding functions. Our study opens new avenues for defining GSK3 isozyme-specific functions in various cellular processes.