Blastocyst formation marks the segregation of the first two cell lineages in the mammalian preimplantation embryo: the inner cell mass (ICM) that will form the embryo proper and the trophectoderm (TE) that gives rise to the trophoblast lineage. Commitment to ICM lineage is attributed to the function of the two transcription factors, Oct4 (encoded by Pou5f1) and Nanog. However, a positive regulator of TE cell fate has not been described. The T-box protein eomesodermin (Eomes) and the caudal-type homeodomain protein Cdx2 are expressed in the TE, and both Eomes and Cdx2homozygous mutant embryos die around the time of implantation. A block in early TE differentiation occurs in Eomes mutant blastocysts. However, Eomes mutant blastocysts implant, and Cdx2 and Oct4expression are correctly restricted to the ICM TE. Blastocoel formation initiates in Cdx2 mutants but epithelial integrity is not maintained and embryos fail to implant. Loss of Cdx2 results in failure to downregulate Oct4 and Nanog in outer cells of the blastocyst and subsequent death of those cells. Thus, Cdx2 is essential for segregation of the ICM and TE lineages at the blastocyst stage by ensuring repression of Oct4 and Nanog in the TE.

Germ cells in the mouse embryo can develop as oocytes or spermatogonia, depending on molecular cues that have not been identified. We found that retinoic acid, produced by mesonephroi of both sexes, causes germ cells in the ovary to enter meiosis and initiate oogenesis. Meiosis is retarded in the fetal testis by the action of the retinoid-degrading enzyme CYP26B1, ultimately leading to spermatogenesis. In testes of Cyp26b1-knockout mouse embryos, germ cells enter meiosis precociously, as if in a normal ovary. Thus, precise regulation of retinoid levels during fetal gonad development provides the molecular control mechanism that specifies germ cell fate.