Preimplantation development culminates with the emergence of three distinct populations: the inner cell mass, primitive endoderm and trophectoderm. Here, we define the mechanisms underlying the requirement of Suds3 in pre/peri-implantation development. Suds3 knockdown blastocysts exhibit a failure of both trophectoderm proliferation as well as a conspicuous lack of primitive endoderm. Expression of essential lineage factors Nanog, Sox2, Cdx2, Eomes, Elf5 and Sox17 are severely reduced in the absence of Suds3. Importantly, we document deficient FGF4/ERK signaling and show that exogenous FGF4 rescues primitive endoderm formation and trophectoderm proliferation in Suds3 knockdown blastocysts. We also show that Hdac1 knockdown reduces Sox2/FGF4/ERK signaling in blastocysts. Collectively, these data define a role for Suds3 in activation of FGF4/ERK signaling and determine an essential molecular role of Suds3/Sin3/HDAC complexes in lineage specification in vivo.