Previous studies have shown that inside cells in the preimplantation mouse embryo do not become committed to the formation of inner cell mass until after blastocyst formation. However, it is not yet clear whether outside cells are also labile late in preimplantation development or whether they become restricted to trophectoderm development at an earlier stage. The present study investigates the potency of outside cells isolated from late morulae just prior to blastocyst formation and shows that some, if not all, outside cells retain the potential to form inner cell mass derivatives in vitro and in vivo. This suggests that trophectoderm cells are not restricted in potential earlier than ICM cells and that all cells of the early embryo may be labile at least until blastulation.