The fibroblast growth factor (FGF) signalling pathway is one of the most ubiquitous in biology. It has diverse roles in development, differentiation and cancer. Embryonic stem (ES) cells are in vitro cell lines capable of differentiating into all the lineages of the conceptus. As such they have the capacity to differentiate into derivatives of all three germ layers and to some extent the extra-embryonic lineages as well. Given the prominent role of FGF signalling in early embryonic development, we explore the role of this pathway in early ES cell differentiation towards the major lineages of the embryo. As early embryonic differentiation is intricately choreographed at the level of morphogenetic movement, adherent ES cell culture affords a unique opportunity to study the basic steps in early lineage specification in the absence of ever shifting complex in vivo microenvironments. Thus recent experiments in ES cell differentiation are able to pinpoint specific FGF dependent lineage transitions that are difficult to resolve in vivo. Here we review the role of FGF signalling in early development alongside the ES cell data and suggest that FGF dependent signalling via phospho-Erk activation maybe a major mediator of transitions in lineage specification. J. Cell. Biochem. 110: 10–20, 2010. © 2010 Wiley-Liss, Inc.