It has been known for many decades that autophagy, a conserved lysosomal degradation pathway, is highly active during differentiation and development. However, until the discovery of the autophagy-related (ATG) genes in the 1990s, the functional significance of this activity was unknown. Initially, genetic knockout studies of ATG genes in lower eukaryotes revealed an essential role for the autophagy pathway in differentiation and development. In recent years, the analyses of systemic and tissue-specific knockout models of ATG genes in mice has led to an explosion of knowledge about the functions of autophagy in mammalian development and differentiation. Here we review the main advances in our understanding of these functions.