Prolonged maintenance of trophoblast stem (TS) cells requires fibroblast growth factor (FGF) 4 and embryonic fibroblast feeder cells or feeder cell-conditioned medium. Previous studies have shown that TGF-beta and Activin are sufficient to replace embryonic fibroblast-conditioned medium. Nodal, a member of the TGF-beta superfamily, is also known to be important in vivo for the maintenance of TS cells in the developing placenta. Our current studies indicate that TS cells do not express the Nodal co-receptor, Cripto, and do not respond directly to active Nodal in culture. Conversely, Activin subunits and their receptors are expressed in the placenta and TS cell cultures, with Activin predominantly expressed by trophoblast giant cells (TGCs). Differentiation of TS cells in the presence of TGC-conditioned medium or exogenous Activin results in a reduction in the expression of TGC markers. In line with TGC-produced Activin representing the active component in TGC-conditioned medium, this differentiation-inhibiting effect can be reversed by the addition of follistatin. Additional experiments in which TS cells were differentiated in the presence or absence of exogenous Activin or TGF-beta show that Activin but not TGF-beta results in the maintenance of expression of TS cell markers, prolongs the expression of syncytiotrophoblast markers, and significantly delays the expression of spongiotrophoblast and TGC markers. These results suggest that Activin rather than TGF-beta (or Nodal) acts directly on TS cells influencing both TS cell maintenance and cell fate, depending on whether the cells are also exposed to FGF4.