The Bone Morphogenetic Protein (BMP) signaling pathway has established roles in early embryonic morphogenesis, particularly in the epiblast. More recently, however, it has also been implicated in development of extraembryonic lineages, including trophectoderm (TE), in both mouse and human. In this review, we will provide an overview of this signaling pathway, with a focus on BMP4, and its role in emergence and development of TE in both early mouse and human embryogenesis. Subsequently, we will build on these in vivo data and discuss the utility of BMP4-based protocols for in vitro conversion of primed vs. naïve pluripotent stem cells (PSC) into trophoblast, and specifically into trophoblast stem cells (TSC). PSC-derived TSC could provide an abundant, reproducible, and ethically acceptable source of cells for modeling placental development.