Cellular differentiation is, by definition, epigenetic. Genome-wide profiling of pluripotent cells and differentiated cells suggests global chromatin remodelling during differentiation, which results in a progressive transition from a fairly open chromatin configuration to a more compact state. Genetic studies in mouse models show major roles for a variety of histone modifiers and chromatin remodellers in key developmental transitions, such as the segregation of embryonic and extra-embryonic lineages in blastocyst stage embryos, the formation of the three germ layers during gastrulation and the differentiation of adult stem cells. Furthermore, rather than merely stabilizing the gene expression changes that are driven by developmental transcription factors, there is emerging evidence that chromatin regulators have multifaceted roles in cell fate decisions.