Induction of the Arf tumor suppressor (encoded by the alternate reading frame of the Cdkn2a locus) following oncogene activation engages a p53-dependent transcriptional program that limits the expansion of incipient cancer cells. Although the p19(Arf) protein is not detected in most tissues of fetal or young adult mice, it is physiologically expressed in the fetal yolk sac, a tissue derived from the extraembryonic endoderm (ExEn). Expression of the mouse p19(Arf) protein marks late stages of ExEn differentiation in cultured embryoid bodies (EBs) derived from either embryonic stem cells or induced pluripotent stem cells. Arf inactivation delays differentiation of the ExEn lineage within EBs, but not the formation of other germ cell lineages from pluripotent progenitors. Arf is required for the timely induction of ExEn cells in response to Ras/Erk signaling and, in turn, acts through p53 to ensure the development, but not maintenance, of the ExEn lineage. Remarkably, a significant temporal delay in ExEn differentiation detected during the maturation of Arf-null EBs is rescued by enforced expression of mouse microRNA-205 (miR-205), a microRNA up-regulated by p19(Arf) and p53 that controls ExEn cell migration and adhesion. The noncanonical and canonical roles of Arf in ExEn development and tumor suppression, respectively, may be conceptually linked through mechanisms that govern cell attachment and migration.