During the peri-implantation development of the mouse embryo from the blastocyst through gastrulation, Pou5f1 (OCT-4) down-regulation is closely linked to the initial step of lineage allocation to extraembryonic and embryonic somatic tissues. Subsequently, differentiation of the lineage precursors is subject to inductive tissue interactions and intercellular signalling that regulate cell proliferation and the acquisition of lineage-specific morphological and molecular characteristics. A notable variation of this process of lineage specification is the persistence of Pou5f1 activity throughout the differentiation of the primordial germ cells, which may underpin their ability to produce pluripotent progeny either as stem cells (embryonic germ cells) in vitro or as gametes in vivo. Nevertheless, intercellular signalling still plays a critical role in the specification of the primordial germ cells. The findings that primordial germ cells can be induced from any epiblast cells and that they share common progenitors with other somatic cells provide compelling evidence for the absence of a pre-determined germ line in the mouse embryo.