A key feature of early vertebrate development is the formation of superficial, epithelial cells that overlie non-epithelial deep cells. In Xenopus, deep and superficial cells show a range of differences, including a different competence for primary neurogenesis. We show that the two cell populations are generated during the blastula stages by perpendicularly oriented divisions. These take place during several cell divisions, in a variable pattern, but at a percentage that varies little between embryos and from one division to the next. The orientation of division correlates with cell shape suggesting that simple geometric rules may control the orientation of division in this system. We show that dividing cells are molecularly polarised such that aPKC is localised to the external, apical, membrane. Membrane localised aPKC can be seen as early as the one-cell stage and during the blastula divisions, it is preferentially inherited by superficial cells. Finally, we show that when 64-cell stage isolated blastomeres divide perpendicularly and the daughters are cultured separately, only the progeny of the cells that inherit the apical membrane turn on the bHLH gene, ESR6e. We conclude that oriented cell divisions generate the superficial and deep cells and establish cell fate diversity between them.