Pluripotent mouse embryonic stem (ES) cell lines have provided a means to analyze gene function in development via gene targeting. At the same time, they provide an opportunity to directly probe gene function by assessing the in vitro differentiation capacity of the ES cells themselves. In addition to providing direct data on lineage decisions not accessible in the complex three-dimensional milieu of the early mouse embryo, controlled differentiation of ES into specific lineages may provide a source of cells for transplantation and gene therapy.