Many germ cells are eliminated during development, long before oogenesis or spermatogenesis. In mouse fetal testes, the majority of germ cell apoptosis coincides with the onset of male differentiation, suggesting coordination of these processes. We studied fetal germ-cell fates and discovered that both apoptosis and differentiation initiate in clonally related clusters. Lineage tracing confirmed that germ cells die as clones independent of intercellular bridges, suggesting that shared intrinsic properties are apoptotic determinants. We identified transcriptional heterogeneity among fetal germ cells that included an apoptosis-susceptible population characterized by failure to differentiate, whereas successful differentiation to prospermatogonia occurred through the expression of epigenetically regulated genes, including LINE1. Our results indicate that the fetal germ-cell fate is based on discrete cell-heritable identities. Elevated DNA methylation in the apoptosis-susceptible subpopulation supports our hypothesis that earlier errors in germ-cell epigenetic reprogramming derail differentiation in cellular progeny, leading to fetal apoptotic selection that ultimately improves the gamete quality.