Specification of cell lineages in mammals begins shortly after fertilization with formation of a blastocyst consisting of trophectoderm,which contributes exclusively to the placenta, and inner cell mass (ICM), from which the embryo develops. Here we report that ablation of the mouse Tead4 gene results in a preimplantation lethal phenotype, and TEAD4 is one of two highly homologous TEAD transcription factors that are expressed during zygotic gene activation in mouse 2-cell embryos. Tead4^-/- embryos do not express trophectoderm-specific genes, such as Cdx2, but do express ICM-specific genes, such as Oct4 (also known as Pou5f1). Consequently, Tead4^-/- morulae do not produce trophoblast stem cells,trophectoderm or blastocoel cavities, and therefore do not implant into the uterine endometrium. However, Tead4^-/- embryos can produce embryonic stem cells, a derivative of ICM, and if the Tead4 allele is not disrupted until after implantation, then Tead4^-/-embryos complete development. Thus, Tead4 is the earliest gene shown to be uniquely required for specification of the trophectoderm lineage.