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Testicular teratomas result from anomalies in germ cell development during embryogenesis. In the 129 family of inbred strains of mice, teratomas initiate around embryonic day (E) 13.5 during the same developmental period in which female germ cells initiate meiosis and male germ cells enter mitotic arrest. Here, we report that three germ cell developmental abnormalities, namely continued proliferation, retention of pluripotency, and premature induction of differentiation, associate with teratoma susceptibility. Using mouse strains with low versus high teratoma incidence (129 versus 129-Chr19(MOLF/Ei)), and resistant to teratoma formation (FVB), we found that germ cell proliferation and expression of the pluripotency factor Nanog at a specific time point, E15.5, were directly related with increased tumor risk. Additionally, we discovered that genes expressed in pre-meiotic embryonic female and adult male germ cells, including cyclin D1 (Ccnd1) and stimulated by retinoic acid 8 (Stra8), were prematurely expressed in teratoma-susceptible germ cells and, in rare instances, induced entry into meiosis. As with Nanog, expression of differentiation-associated factors at a specific time point, E15.5, increased with tumor risk. Furthermore, Nanog and Ccnd1, genes with known roles in testicular cancer risk and tumorigenesis, respectively, were co-expressed in teratoma-susceptible germ cells and tumor stem cells, suggesting that retention of pluripotency and premature germ cell differentiation both contribute to tumorigenesis. Importantly, Stra8-deficient mice had an 88% decrease in teratoma incidence, providing direct evidence that premature initiation of the meiotic program contributes to tumorigenesis. These results show that deregulation of the mitotic-meiotic switch in XY germ cells contributes to teratoma initiation.