Human embryonic stem cells (hESCs) have been routinely treated with bone morphogenetic protein and/or inhibitors of activin/nodal signaling to obtain cells that express trophoblast markers. Trophoblasts can terminally differentiate to either extravillous trophoblasts or syncytiotrophoblasts. The signaling pathways that govern the terminal fate of these trophoblasts are not understood. We show that activin/nodal signaling switches the terminal fate of these hESC-derived trophoblasts. Inhibition of activin/nodal signaling leads to formation of extravillous trophoblast, whereas loss of activin/nodal inhibition leads to the formation of syncytiotrophoblasts. Also, the ability of hESCs to form bona fide trophoblasts has been intensely debated. We have examined hESC-derived trophoblasts in the light of stringent criteria that were proposed recently, such as hypomethylation of the ELF5-2b promoter region and down-regulation of HLA class I antigens. We report that trophoblasts that possess these properties can indeed be obtained from hESCs. © 2015 by The American Society for Biochemistry and Molecular Biology, Inc.