‘Stem cell’ has practically become a household term, but what is a stem cell and where does it come from? Insight into these questions has come from the early mouse embryo, or blastocyst, from which three kinds of stem cells have been derived: embryonic stem (ES) cells, trophoblast stem (TS) cells, and extraembryonic endoderm (XEN) cells. These stem cells appear to derive from three distinct tissue lineages within the blastocyst: the epiblast, the trophectoderm, and the extraembryonic endoderm. Understanding how these lineages arise during development will illuminate efforts to understand the establishment and maintenance of the stem cell state and the mechanisms that restrict stem cell potency. Genetic analysis has enabled the identification of several genes important for lineage decisions in the mouse blastocyst. Among these, Oct4, Nanog, Cdx2, and Gata6 encode transcription factors required for the three lineages of the blastocyst and for the maintenance their respective stem cell types. Interestingly, genetic manipulation of several of these factors can cause lineage switching among these stem cells, suggesting that knowledge of key lineage-determining genes could help control differentiation of stem cells more generally. Pluripotent stem cells have also been isolated from the human blastocyst, but the relationship between these cells and stem cells of the mouse blastocyst remains to be explored. This review describes the genetic regulation of lineage allocation during blastocyst formation and discusses similarities and differences between mouse and human ES cells.