Laminin-1 is essential for early embryonic basement membrane assembly and differentiation. Several steps can be distinguished, i.e., the expression of laminin and companion matrix components, their accumulation on the cell surface and assembly into basement membrane between endoderm and inner cell mass, and the ensuing differentiation of epiblast. In this study, we used differentiating embryoid bodies derived from mouse embryonic stem cells null for γ1-laminin, β1-integrin and α/β-dystroglycan to dissect the contributions of laminin domains and interacting receptors to this process. We found that (a) laminin enables β1-integrin–null embryoid bodies to assemble basement membrane and achieve epiblast with β1-integrin enabling expression of the laminin α1 subunit; (b) basement membrane assembly and differentiation require laminin polymerization in conjunction with cell anchorage, the latter critically dependent upon a heparin-binding locus within LG module-4; (c) dystroglycan is not uniquely required for basement membrane assembly or initial differentiation; (d) dystroglycan and integrin cooperate to sustain survival of the epiblast and regulate laminin expression; and (e) laminin, acting via β1-integrin through LG1–3 and requiring polymerization, can regulate dystroglycan expression.