A conserved feature of early vertebrate embryos is the formation of simple epithelial layer of cells which surrounds the embryo and protects it from the external environment. This epithelium is called the trophectoderm in mammals, the superficial layer in Xenopus and the enveloping layer in zebrafish. This project investigates what promotes differentiation of this cell type. In Xenopus embryos aPKC and Notch signalling were found to be unable to promote differentiation of the superficial layer. In contrast, BMP signalling can promote expression of a number of transcriptional regulators, including members of the Grhl and Msx families and differentiation of the superficial layer. This pathway is initiated in the underlying deep cells, but not all target genes are activated so differentiation does not occur in these cells. The role of BMP signalling in mouse development was investigated by using mouse embryonic stem cells (mESCs) as the model. BMP4 is sufficient to induce mESCs to form a polarised epithelial cell type and that these epithelial cells appear trophoblast in fate. BMP signalling activates Grhl and Msx genes in mESCs, as it does in Xenopus embryos. This suggests that similar target genes are activated by BMP signalling in the first epithelium of Xenopus and mouse. Based on this data it is tempting to propose that BMP signalling acts in a conserved manor to promote differentiation of the first epithelium in diverse vertebrates.