Embryonic stem cells (ESCs) offer a powerful in vitro model to study mechanisms implicated in cell fate decision. Developmental pathways by which pluripotent ESCs become committed to specific lineages are reflected in dynamic changes of signaling and transcriptional programs. However, the mechanisms that govern the regulatory intracellular networks underlying lineage fate decisions and differentiation programs remain poorly understood and differ significantly in different species. In this review we analyze the current understanding of the signaling mechanisms and transcriptional regulation of differentiation of murine and human ESCs into the mesoderm.