The first lineage decision during mouse development is the establishment of trophectoderm and inner cell mass lineages, morphologically distinguishable at the blastocyst stage. The Caudal-like transcription factor Cdx2 is required for repression of inner cell mass genes Oct4 and Nanog in the trophectoderm. Expression of Cdx2 in the trophectoderm is thus one of the earliest known events in lineage determination. However, it is not clear whether the Cdx2 expression pattern is the cause or the consequence of this first lineage decision. Here, we show that Cdx2 is initially ubiquitously expressed, and becomes progressively upregulated in outside, future trophectoderm cells prior to blastocyst formation. Ubiquitous Cdx2 expression begins around the time of cell polarization, but we show that cell polarization is independent of zygotic Cdx2. Finally, we show functionally that Cdx2 is downstream of lineage allocation since Cdx2 mutant cells, which show cell-autonomous defects in expression of Oct4, Nanog, and the trophectoderm marker Eomesodermin, do not preferentially contribute to inner cell mass in chimeric blastocysts. Cdx2 therefore appears to act downstream of the first lineage decision, suggesting that processes influencing lineage allocation or morphogenesis may regulate Cdx2 expression along the inside/outside axis of the embryo.