Epithelial tissues typically form lumina. In mammalian blastocysts, in which the first embryonic lumen forms, many studies have investigated how the cell lineages are specified through genetics and signaling, whereas potential roles of the fluid lumen have yet to be investigated. We discover that in mouse pre-implantation embryos at the onset of lumen formation, cytoplasmic vesicles are secreted into intercellular space. The segregation of epiblast and primitive endoderm directly follows lumen coalescence. Notably, pharmacological and biophysical perturbation of lumen expansion impairs the specification and spatial segregation of primitive endoderm cells within the blastocyst. Luminal deposition of FGF4 expedites fate specification and partially rescues the reduced specification in blastocysts with smaller cavities. Combined, our results suggest that blastocyst lumen expansion plays a critical role in guiding cell fate specification and positioning, possibly mediated by luminally deposited FGF4. Lumen expansion may provide a general mechanism for tissue pattern formation.