The germ line is unique in that highly specialised cells must be formed while retaining genomic totipotency. In mice, germ cells are derived from the pluripotent epiblast cells under the influence of inductive signals. This specification event involves reactivation or maintenance of core regulators of pluripotency, activation of germ line specific genetic programs, silencing of somatic cell programs and strict epigenetic management. These programs are thought to allow germ line specification while at the same time protecting underlying genomic totipotency. At this stage germ cells do not exhibit overt pluripotency but are able to establish pluripotent embryonic germ cells in culture. The primordial germ cells migrate to and populate the gonads at around embryonic day 10.5 and then undergo further epigenetic reprogramming and sex determination. Under the influence of the gonadal somatic cells the germ cells commit to male development and enter mitotic arrest or commit to female development and enter meiosis. This process involves down regulation of the core regulators of pluripotency, further differentiation of the germ cells, tight cell cycle regulation and loss of the germ cells ability to form pluripotent cells in culture. If this differentiation process is disrupted, germ cells can regain pluripotency and form tumours. This review focuses on the formation and early differentiation of germ cells in mammals with particular emphasis on the balance between germ cell differentiation and the maintenance of underlying genomic totipotency.