In female mammalian embryos, inactivation of one of the two X chromosomes in each cell regulates X-linked gene expression. X chromosome inactivation (XCI) is dependent on the non-coding RNA Xist, which is expressed from and coats the inactivated X chromosome. Inheritance of a paternally derived Xist mutation causes embryonic lethality because the inactivation of the paternally inherited X chromosome that occurs in the extra-embryonic lineages of female mouse embryos during imprinted XCI fails. Now, Terry Magnuson and colleagues (p. 2130) describe the exact consequences of failed XCI within the extra-embryonic ectoderm (ExE). The ExE of X/XXist– embryos consists mainly of differentiated giant cells and their progenitors, they report, and less differentiated spongiotrophoblast precursors are not maintained. At E6.5, the ExE lacks CDX2, which is required to maintain the ExE’s multipotent state. Moreover, trophoblast stem cell lines derived from X/XXist– blastocysts completely reverse normal imprinted XCI patterns. These results suggest that dosage compensation is indispensable for the maintenance of trophoblast progenitors and that imprinted XCI is probably erased in ExE cells.