Abstract Embryonic stem cells (ESCs) which are susceptible to DNA damage depend on a robust and highly efficient DNA damage response (DDR) mechanism for their survival. However, the implications of physical force-mediated DNA damage on ESC fate remains unclear. We show that stiffness-dependent spreading of mouse ESCs (mESCs) induces DNA damage through nuclear compression, with DNA damage causing differentiation through early induction of Lamin A/C expression. Interestingly, differentiation is associated with rescue of DNA damage and activation of the DDR factor ATR. While ATR is typically known to play roles in DDR pathway, its role during stiffness-mediated nuclear compression and mESC differentiation is unknown. Nuclear enrichment of activated ATR on stiff substrates and reduction of Lamin A/C expression upon ATR inhibition suggests that mESC differentiation is driven by nuclear compression-mediated DNA damage and involves ATR-dependent modulation of Lamin A/C.