The successful development from a single cell zygote into a complex multicellular organism requires precise coordination of multiple cell-fate decisions. The very first of these is lineage specification into the inner cell mass (ICM) and trophectoderm (TE) during mammalian preimplantation development. In mouse embryos, transcription factors (TFs) such as Oct4, Sox2 and Nanog are enriched in cells of ICM, which gives rise to the fetus and yolk sac. Conversely, TFs such as Cdx2 and Eomes become highly upregulated in TE, which contribute to the placenta. Here we review the current understanding of key transcriptional control mechanisms and genes responsible for these distinct differences during the first cell lineage specification. In particular we highlight recent insights gained through advances in genome manipulation, live imaging, single-cell transciptomics, and loss of function studies.