Assisted reproduction technology offers the opportunity to observe the very early stages of human development. However, due to practical constraints, for decades morphological examination of embryo development has been undertaken at a few isolated time points at the stages of fertilisation (Day 1), cleavage (Day 2-3) and blastocyst (Day 5-6). Rather surprisingly, the morula stage (Day 3-4) has been so far neglected, despite its involvement in crucial cellular processes and developmental decisions. The objective of this review is to collate novel and unsuspected insights into developmental processes occurring during formation of the morula, highlighting the key importance of this stage for a better understanding of preimplantation development and an improvement of ART. PubMed was used to search the MEDLINE database for peer-reviewed English-language original articles and reviews concerning the morula stage in mammals. Searches were performed by adopting 'embryo', 'morula', 'compaction', 'cell fate' and 'IVF/assisted reproduction' as main terms, in association with other keywords expressing concepts relevant to the subject (e.g. cell polarity). The most relevant publications, i.e. those concerning major phenomena occurring during formation of the morula in established experimental models and the human species, were assessed and discussed critically. Novel live cell imaging technologies and cell biology studies have extended our understanding of morula formation as a key stage for the development of the blastocyst and determination of the inner cell mass (ICM) and the trophectoderm (TE). Cellular processes, such as dynamic formation of filopodia and cytoskeleton-mediated zippering cell-to-cell interactions, intervene to allow cell compaction (a geometrical requisite essential for development) and formation of the blastocoel, respectively. At the same time, differential orientation of cleavage planes, cell polarity and cortical tensile forces interact and cooperate to position blastomeres either internally or externally, thereby influencing their cellular fate. Recent time lapse microscopy (TLM) observations also suggest that in the human the process of compaction may represent an important checkpoint for embryo viability, through which chromosomally abnormal blastomeres are sensed and eliminated by the embryo. In clinical embryology, the morula stage has been always perceived as a 'black box' in the continuum of preimplantation development. This has dictated its virtual exclusion from mainstream ART procedures. Recent findings described in this review indicate that the morula, and the associated process of compaction, as a crucial stage not only for the formation of the blastocyst, but also for the health of the conceptus. This understanding may open new avenues for innovative approaches to embryo manipulation, assessment and treatment.