Anterior-posterior (A-P) polarity of mouse embryos is established by distal visceral endoderm (DVE) at embryonic day (E) 5.5. Lefty1 is expressed first at E3.5 in a subset of epiblast progenitor cells (L1epi cells) and then in a subset of primitive endoderm cells (L1dve cells) fated to become DVE. Here we studied how prospective DVE cells are selected. Lefty1 expression in L1epi and L1dve cells depends on Nodal signaling. A cell that experiences the highest level of Nodal signaling begins to express Lefty1 and becomes an L1epi cell. Deletion of Lefty1 alone or together with Lefty2 increased the number of prospective DVE cells. Ablation of L1epi or L1dve cells triggered Lefty1 expression in a subset of remaining cells. Our results suggest that selection of prospective DVE cells is both random and regulated, and that a fixed prepattern for the A-P axis does not exist before the blastocyst stage.