During mammalian gonadal development, somatic cues regulate the sex-specific development of foetal germ cells and control the transition between proliferation and cell-fate commitment. This transition is particularly important for male germ cells: too little proliferation reduces sperm numbers and fertility, whereas escape from commitment and prolonged pluripotency can cause testicular germ cell tumours. Now, Josephine Bowles, Peter Koopman and colleagues (p. 4123) report that the TGFβ morphogen Nodal regulates this transition in mice. The researchers show that Nodal signalling is active in XY germ cells at the developmental stage when this transition occurs and that Nodal signalling is triggered when somatic signals, including FGF9, induce testicular germ cells to upregulate the Nodal co-receptor Cripto. Genetic suppression of Nodal signalling leads to depressed pluripotency marker expression and early XY germ cell differentiation, they report, whereas NODAL and CRIPTO are upregulated in human testicular tumours. These results indicate that Nodal signalling regulates male germ cell potency during normal development and provides new clues about the aetiology of testicular cancer.