Development entails patterned emergence of diverse cell types within the embryo. In mammals, cells positioned inside the embryo give rise to the inner cell mass (ICM), which eventually forms the embryo itself. Yet, the molecular basis of how these cells recognise their 'inside' position to instruct their fate is unknown. Here, we show that provision of extracellular matrix (ECM) to isolated embryonic cells induces ICM specification and alters the subsequent spatial arrangement between epiblast (EPI) and primitive endoderm (PrE) cells that emerge within the ICM. Notably, this effect is dependent on integrin β1 activity and involves apical-to-basal conversion of cell polarity. We demonstrate that ECM-integrin activity is sufficient for 'inside' positional signalling and is required for correct EPI/PrE patterning. Thus, our findings highlight the significance of ECM-integrin adhesion in enabling position sensing by cells to achieve tissue patterning.