During early development, the eutherian mammalian embryo forms a blastocyst comprising an outer trophectoderm epithelium and enclosed inner cell mass (ICM). The short-term goal of blastocyst morphogenesis, including epithelial differentiation and segregation of the ICM, is mainly regulated autonomously and comprises a combination of temporally controlled gene expression, cell polarisation, differentiative cell divisions and cell-cell interactions. This aspect of blastocyst biogenesis is reviewed, focusing, in particular, on the maturation and role of cell adhesion systems. Early embryos are also sensitive to their environment, which can affect their developmental potential in diverse ways and may lead to long-term consequences relating to fetal or postnatal growth and physiology. Some current concepts of embryo-environment interactions, which may impact on future health, are also reviewed.