Embryonic stem (ES) cells have provided a valid model to understand early events of mammalian lineage specification and differentiation, leading to important insights into the mechanisms that control embryogenesis at the molecular and cellular levels. Furthermore, ES cells have recently evoked great scientific interest as ideal candidates for the generation of tissues for transplantation therapies. In this respect, particular attention has been paid to the molecules and signaling pathways triggering ES cell differentiation. The EGF-CFC Cripto protein is a key regulator of ES cells fate. The cripto gene is expressed both in ES cells and during the early phases of embryo development, while, in the adult, it is reactivated in a wide range of epithelial cancers. This review will discuss recent findings on the molecular basis of Cripto signaling in ES cell differentiation, providing an intriguing link between stem cell and tumor biology.