In mammals, dosage compensation is achieved by transcriptional silencing of one of the two female X chromosomes. X inactivation is dynamically regulated in development. The non-coding Xist RNA localizes to the inactive X, initiates gene repression in the early embryo, and later stabilizes the inactive state. Different functions of Xist are observed depending on which epigenetic regulatory pathways are active in a given cell. Because Xist has evolved recently, with the origin of placental mammals, the underlying pathways are also important in regulating developmental control genes. This review emphasizes the opportunity that Xist provides to functionally define epigenetic transitions in development, to understand cell identity, pluripotency and stem cell differentiation.