Because mouse embryonic stem cells (mESCs) do not contribute to the formation of extraembryonic placenta when they are injected into blastocysts, it is believed that mESCs do not differentiate into trophoblast whereas human embryonic stem cells (hESCs) can express trophoblast markers when exposed to bone morphogenetic protein 4 (BMP4) in vitro. To test whether mESCs have the potential to differentiate into trophoblast, we assessed the effect of BMP4 on mESCs in a defined monolayer culture condition. The expression of trophoblast-specific transcription factors such as Cdx2, Dlx3, Esx1, Gata3, Hand1, Mash2, and Plx1 was specifically upregulated in the BMP4-treated differentiated cells, and these cells expressed trophoblast markers. These results suggest that BMP4 treatment in defined culture conditions enabled mESCs to differentiate into trophoblast. This differentiation was inhibited by serum or leukemia inhibitory factor, which are generally used for mESC culture. In addition, we studied the mechanism underlying BMP4-directed mESC differentiation into trophoblast. Our results showed that BMP4 activates the Smad pathway in mESCs inducing Cdx2 expression, which plays a crucial role in trophoblast differentiation, through the binding of Smad protein to the Cdx2 genomic enhancer sequence. Our findings imply that there is a common molecular mechanism underlying hESC and mESC differentiation into trophoblast.