During embryonic development signalling pathways act repeatedly in different contexts to pattern the emerging germ layers. Understanding how these different responses are regulated is a central question for developmental biology. In this study, we used mouse embryonic stem cell (mESC) differentiation to uncover a new mechanism for PI3K signalling that is required for endoderm specification. We found that PI3K signalling promotes the transition from naïve endoderm precursors into committed anterior endoderm. PI3K promoted commitment via an atypical activity that delimited epithelial-to-mesenchymal transition (EMT). Akt1 transduced this activity via modifications to the extracellular matrix (ECM) and appropriate ECM could itself induce anterior endodermal identity in the absence of PI3K signalling. PI3K/Akt1-modified ECM contained low levels of Fibronectin (Fn1) and we found that Fn1 dose was key to specifying anterior endodermal identity in vivo and in vitro. Thus, localized PI3K activity affects ECM composition and ECM in turn patterns the endoderm. DOI: http://dx.doi.org/10.7554/eLife.00806.001.