Considerable progress has been made in understanding the roles of Sox2 and Oct4 in embryonic stem cells and mammalian embryogenesis. Specifically, significant progress has been made in answering three questions about the functions of Sox2 and Oct4, which are the focus of this review. 1) Are the first or second cell lineage decisions during embryogenesis controlled by Oct4 and/or Sox2? 2) Do the levels of Oct4 and Sox2 need to be maintained within narrow limits to promote normal development and to sustain the self-renewal of pluripotent stem cells? 3) Do Oct4 and Sox2 work closely together or is the primary role of Sox2 in pluripotent cells to ensure the expression of Oct4? Although significant progress has been made in answering these questions, additional studies are needed to resolve several important remaining issues. Nonetheless, the preponderance of the evidence suggests there is considerable crosstalk between Sox2 and Oct4, and further suggests Sox2 and Oct4 function as molecular rheostats and utilize negative feedback loops to carefully balance their expression and other critical genes during embryogenesis. This article is part of a Special Issue entitled: The Oct transcription factor family, edited by Dr. Dean Tantin.