Development of multicellular organisms requires specification of diverse cell types. In plants, development is continuous and because plant cells are surrounded by rigid cell walls, cell division and specification of daughter cell fate must be carefully orchestrated. During embryonic and postembryonic plant development, the specification of cell types is determined both by positional cues and cell lineage. The establishment of distinct transcriptional domains is a fundamental mechanism for determining different cell fates. In this review, we focus on four examples from recent literature of switches operating in cell fate decisions that are regulated by transcriptional mechanisms. First, we highlight a transcriptional mechanism involving a mobile transcription factor in formation of the two ground tissue cell types in roots. Specification of vascular cell types is then discussed, including new details about xylem cell-type specification via a mobile microRNA. Next, transcriptional regulation of two key embryonic developmental events is considered: establishment of apical-basal polarity in the single-celled zygote and specification of distinct root and shoot stem cell populations in the plant embryo. Finally, a dynamic transcriptional mechanism for lateral organ positioning that integrates spatial and temporal information into a repeating pattern is summarized.