SUMMARYThe hypoblast is an essential extra-embryonic tissue set aside within the inner cell mass early in mammalian embryo development, in the blastocyst. Research with human embryos is challenging. Thus, stem cell models that reproduce hypoblast differentiation provide valuable alternatives. We show here that human naïve PSC to hypoblast differentiation proceeds via reversion to a transitional ICM-like state, from which hypoblast emerges in concordance with the trajectory in human blastocysts. We identified a window when fibroblast growth factor (FGF) signalling is critical for hypoblast specification. Revisiting FGF signalling in human embryos revealed that inhibition in the early blastocyst suppresses hypoblast formation.In vitro, the induction of hypoblast is synergistically enhanced by limiting trophectoderm and epiblast fates. This finding revises previous reports and establishes a conservation in lineage specification between mouse and human. Overall, this study demonstrates the utility of human naïve PSC-based models in elucidating mechanistic features of early human embryogenesis.