Nanog is a principal pluripotency regulator exhibiting a disperse distribution within stem cell populations in vivo and in vitro. Increasing evidence points to a functional role of Nanog heterogeneity on stem cell fate decisions. Allelic control of Nanog gene expression was reported recently in mouse embryonic stem cells. To better understand how this mode of regulation influences the observed heterogeneity of NANOG in stem cell populations, we assembled a multiscale stochastic population balance equation framework. In addition to allelic control, gene expression noise and random partitioning at cell division were considered. As a result of allelic Nanog expression, the distribution of Nanog exhibited three distinct states but when combined with transcriptional noise the profile became bimodal. Regardless of their allelic expression pattern, initially uniform populations of stem cells gave rise to the same Nanog heterogeneity within ten cell cycles. Depletion of NANOG content in cells switching off both gene alleles was slower than the accumulation of intracellular NANOG after cells turned on at least one of their Nanog gene copies pointing to Nanog state-dependent dynamics. Allelic transcription of Nanog also raises issues regarding the use of stem cell lines with reporter genes knocked in a single allelic locus. Indeed, significant divergence was observed in the reporter and native protein profiles depending on the difference in their half-lives and insertion of the reporter gene in one or both alleles. In stem cell populations with restricted Nanog expression, allelic regulation facilitates the maintenance of fractions of self-renewing cells with sufficient Nanog content to prevent aberrant loss of pluripotency. Our findings underline the role of allelic control of Nanog expression as a prime determinant of stem cell population heterogeneity and warrant further investigation in the contexts of stem cell specification and cell reprogramming. 