Lefty is a member of transforming growth factor-beta (TGF-beta) superfamily and a potent antagonist of the TGF-beta/Nodal/Activin signaling pathway. Lefty is critical in sustaining self-renewal/pluripotency status, and implicated in the differentiation of embryonic stem cells (ESCs). However, emerging studies depict Lefty as a multifaceted protein involved in myriad cellular events. Lefty proteins (human Lefty A and B) are secreted glycoproteins, but their mode of secretion and the significance of their "glycan" moiety remain mostly unexplored. By employing an in vitro system of human ESCs (hESCs), we observed that Lefty protein(s) are encased in exosomes for extracellular release. The exosomal- and cell-associated Lefty diverge in their proteolytic processing, and possess N-glycan structures of high mannose and complex nature. Differentiation of hESCs to mesenchymal cells (MSCs) or neuronal progenitor cells (NPCs) entails distinct changes in the Lefty A/Lefty B gene(s), and protein expression. Specifically, the proteolytic cleavage and N-glycan composition of the cell-associated and exosomal Lefty differ in the differentiated progenies. These modifications affected Lefty's inhibitory effect on Nodal signaling in aggressive melanoma cells. The microheterogeneity in the processing and glycosylation of Lefty protein(s) between hESCs, MSCs, and NPCs could present efficient means of diversifying the endogenous functions of Lefty. Whether Lefty's diverse functions in embryonic patterning, as well as its diffusion range in the extracellular environment, are similarly affected remains to be determined. Our studies underscore the potential relevance of Lefty-packaged exosomes for combating debilitating diseases such as cancer.