The formation of the three lineages of the mouse blastocyst provides a powerful model system to study interactions among cell behavior, cell signaling, and lineage development. Hippo signaling differences between the inner and outer cells of the early cleavage stages, combined with establishment of a stably polarized outer epithelium, lead to the establishment of the inner cell mass and the trophectoderm, whereas FGF signaling differences among the individual cells of the ICM lead to gradual separation and segregation of the epiblast and primitive endoderm lineages. Events in the late blastocyst lead to the formation of a special subset of cells from the primitive endoderm that are key sources for the signals that establish the subsequent body axis. The slow pace of mouse early development, the ability to culture embryos over this time period, the increasing availability of live cell imaging tools, and the ability to modify gene expression at will are providing increasing insights into the cell biology of early cell fate decisions.