Stem cells are functionally defined by their ability to self-renew and generate a progeny capable of creation or reconstitution of various tissues. Microarray analysis has shown a member of the transforming growth factor (TGF)-beta superfamily, Lefty, to be the single most abundant inhibitor in stem cells and in maternal decidua that supports embryo implantation. Lefty is regulated by pathways such as Smad (Sma and Mad [mothers against decapentaplegic]) and WNT (wingless-type) and by the transcriptional factor Oct3/4 (octamer-binding transcription factor 3/4), which support "stemness." Lefty is also induced upon exit from the state of stemness, including forced in vitro differentiation, and leukemia inhibitory factor withdrawal. Lefty is a candidate in cell-fate decisions because of its unique ability to modulate the expression of TGF-beta family proteins such as Nodal and by blanket inhibition of the activity of members of this family which require EGF-CFC (epidermal growth factor-Cripto, Frl-1, and Cryptic) as a coreceptor.