The study focused on the process by which these cells renew and increase in number.
Researchers found that a protein, which switches on genes to allow embryonic stem cells to self-renew, works better when the natural-occurring level of the protein is reduced. Reducing the level of this protein - called Oct 4 - did not result in reduced numbers of new stem cells, as previously believed.
The study, published in the journal Cell Stem Cell, was funded by the Biotechnology and Biological Sciences Research Council, the Medical Research Council, the Wellcome Trust, and the Human Frontier Science Programme.
During embryonic development, cells that have the capacity to become any cell type in the body - called pluripotent stem cells - can either renew themselves by multiplying in number or differentiate to become cells found in different parts of the body, for instance skin or liver.
This need for pluripotent cells to increase in number is important so that there is a sufficient supply of them to be differentiated into other cell types.
Scientists at the University of Edinburgh found that when there were lower levels of Oct 4, the protein bound much more tightly to key sections of DNA which switched on genes responsible for pluripotent stem cells renewal.
The findings could help to improve the way in which stem cells are cultured in the laboratory, providing a better understanding of the processes needed for cells to divide and multiply or to generate different cell types.
Professor Ian Chambers, who led the study, said: "What we found was a complete surprise, as we thought that when levels of this key protein were reduced the numbers of pluripotent stem cells being generated would also fall. Instead, it appears that when the levels of Oct 4 are lower, the balance is tipped in favour of self-renewal over stem cell differentiation."