DNA methylation is reprogrammed during early embryogenesis by active and passive mechanisms in advance of the first differentiation event producing the embryonic and extraembryonic lineage cells which contribute to the future embryo proper and to the placenta respectively. Embryonic lineage cells re-acquire a highly methylated genome dependent on the DNA methyltransferases (DNMTs) Dnmt3a and Dnmt3b that are required for de novo methylation. By contrast, extraembryonic lineage cells remain globally hypomethylated but the mechanisms that underlie this hypomethylation remain unknown.We have employed an inducible system that supports differentiation between these two lineages and recapitulates the DNA methylation asymmetry generated in vivo. We find that in vitro down-regulation of Oct3/4 in ES cells recapitulates the decline in global DNA methylation associated with trophoblast. The de novo DNMTs Dnmt3a2 and Dnmt3b are down-regulated during trophoblast differentiation. Dnmt1, which is responsible for maintenance methylation, is expressed comparably in embryonic and trophoblast lineages, however importantly in trophoblast giant cells Dnmt1fails to be attracted to replication foci, thus allowing loss of DNA methylation while implicating a passive demethylation mechanism. Interestingly, Dnmt1 localization was restored by exogenous Np95/Uhrf1, a Dnmt1 chaperone required for Dnmt1-targeting to replication foci, yet DNA methylation levels remained low. Over-expression of de novo DNMTs also failed to increase DNA methylation in target sequences.We propose that induced trophoblast cells may have a mechanism to resist genome-wide increases of DNA methylation, thus reinforcing the genome-wide epigenetic distinctions between the embryonic and extraembryonic lineages in the mouse. This resistance may be based on transcription factors or on global differences in chromatin structure.