Germ cell fate in mice is induced in pluripotent epiblast cells in response to signals from extraembryonic tissues. The specification of approximately 40 founder primordial germ cells and their segregation from somatic neighbours are important events in early development. We have proposed that a critical event during this specification includes repression of a somatic programme that is adopted by neighbouring cells. Here we show that Blimp1 (also known as Prdm1), a known transcriptional repressor, has a critical role in the foundation of the mouse germ cell lineage, as its disruption causes a block early in the process of primordial germ cell formation. Blimp1-deficient mutant embryos form a tight cluster of about 20 primordial germ cell-like cells, which fail to show the characteristic migration, proliferation and consistent repression of homeobox genes that normally accompany specification of primordial germ cells. Furthermore, our genetic lineage-tracing experiments indicate that the Blimp1-positive cells originating from the proximal posterior epiblast cells are indeed the lineage-restricted primordial germ cell precursors.