Inner cell masses (ICMs) were isolated from early blastocysts by immunosurgery and incubated in a dense suspension of melanin granules for 3 h after 21 h in culture. The majority of such labelled ICMs subsequently formed outgrowths in vitro in which either giant cells or small solitary cells contained melanin granules. However, a substantial minority produced outgrowths in which both types of cell were unequivocally labelled. Labelled cells appeared from the results of control experiments to have originated within the external layer of the ICM. The giant cells were indistinguishable morphologically from those formed by authentic trophectodermal tissue. The small cells were identified as belonging to the extraembryonic endodermal lineage on the basis of their distribution in host conceptuses following injection into blastocysts. These findings support the conclusion reached in previous studies that early ICM cells can engage in trophectodermal differentiation under certain conditions. In addition, by providing evidence that both trophectoderm and endoderm cells can differentiate from the outer layer of the same ICM, they argue that loss of cellular lability is not coordinated throughout this tissue. Heterogeneity in the differentiation of external cells may depend on differences in both the stage of the mitotic cycle and the number of such cycles that they have completed since fertilization. Finally, cell number in isolated early ICMs was found to increase approximately two-fold during the first 24 h of culture in the present experiments. This contrasts with the results of previous experiments in which cell number either increased more modestly or failed to do so altogether.