Primitive endoderm (PE) and epiblast (EPI) are two lineages derived from the inner cell mass (ICM) of the E3.5 blastocyst. Recent studies showed that EPI and PE progenitors expressing the lineage-specific transcriptional factors Nanog and Gata6, respectively, arise progressively as the ICM develops. Subsequent sorting of the two progenitors during blastocyst maturation results in the ormation of morphologically distinct EPI and PE layers at E4.5. It is, however, unknown how the initial differences between the two populations become established in the E3.5 blastocyst. Because the ICM cells are derived from two distinct rounds of polarized cell divisions during cleavage, a possible role for cell lineage history in promoting EPI versus PE fate has been proposed. We followed cell lineage from the eight-cell stage by live cell tracing and could find no clear linkage between developmental history of individual ICM cells and later cell fate. However, modulating FGF signaling levels by inhibition of the receptor/MAP kinase pathway or by addition of exogenous FGF shifted the fate of ICM cells to become either EPI or PE, respectively. Nanog- or Gata6-expressing progenitors could still be shifted towards the alternative fate by modulating FGF signaling during blastocyst maturation, suggesting that the ICM progenitors are not fully committed to their final fate at the time that initial segregation of gene expression occurs. In conclusion, we propose a model in which stochastic and progressive specification of EPI and PE lineages occurs during maturation of the blastocyst in an FGF/MAP kinase signal-dependent manner.