The primitive endoderm arises from the inner cell mass during mammalian pre-implantation development. It faces the blastocoel cavity and later gives rise to the extraembryonic parietal and visceral endoderm. Here, we investigate a key step in primitive endoderm development, the acquisition of apico-basolateral polarity and epithelial characteristics by the non-epithelial inner cell mass cells. Embryoid bodies, formed from mouse embryonic stem cells, were used as a model to study this transition. The outer cells of these embryoid bodies were found to gradually acquire the hallmarks of polarised epithelial cells and express markers of primitive endoderm cell fate. Fgf receptor/Erk signalling is known to be required for specification of the primitive endoderm, but its role in polarisation of this tissue is less well understood. To investigate the function of this pathway in the primitive endoderm, embryoid bodies were cultured in the presence of a small molecule inhibitor of Mek. This inhibitor caused a loss of expression of markers of primitive endoderm cell fate and maintenance of the pluripotency marker Nanog. In addition, a mislocalisation of apico-basolateral markers and disruption of the epithelial barrier, which normally blocks free diffusion across the epithelial cell layer, occurred. Two inhibitors of the Fgf receptor elicited similar phenotypes, suggesting that Fgf receptor signalling promotes Erk-mediated polarisation. This data shows that primitive endoderm cells of the outer layer of embryoid bodies gradually polarise, and formation of a polarised primitive endoderm layer requires the Fgf receptor/Erk signalling pathway.