During the initial stages of blastocyst formation, inner cell mass cells differentiate into epiblast (Epi) and primitive endoderm (PrE) cells. Epi cells express FGF4, which induces ERK signalling in neighbouring cells to turn them into PrE cells. However, both Epi and PrE cells express FGFR1, the main FGF receptor required for PrE specification. Claire Chazaud, Masatsugu Ema and colleagues now study how these two cell types are differentially specified, despite their similar receptor make-up. By establishing methods to detect phosphorylation (reflecting activation) of ERK (pERK) in preimplantation embryos, they show that pERK is observed at the start of blastocyst formation. pERK is initially present in uncommitted cells and but can increasingly be seen in PrE cells as development progresses. Moreover, ERK phosphorylation is dependent on Fgf4 expression, which in turn requires the transcription factor NANOG. The authors also demonstrate that the Ets-related factor ETV5 is expressed in Epi cells in a NANOG-dependent manner and propose that these two transcription factors negatively regulate the FGF/ERK pathway. Thus, these findings suggest that NANOG directs the specification of Epi and PrE cells via a two-pronged mechanism: it stimulates paracrine FGF/ERK signalling, which induces PrE cell specification, while simultaneously inhibiting ERK activity in Epi cells by driving transcription of Etv5.