Differentiation in vitro of mouse F9 embryonal carcinoma (EC) cells to the parietal endoderm (PE) mimics processes of development of the early mouse embryo. This differentiation is accompanied by a dramatic down-regulation of all genes transcribed by RNA polymerase III (pol III). Complementation of extracts from cells, differentiated for various time periods with purified pol III transcription factors show for the first time that TFIIIC1 can substantially restore this impaired transcription, particularly in the early stages of differentiation. At later stages (day 7) the TBP (TATA-binding protein )-TAF complex, TFIIIBbeta, may also become limiting, which can contribute to but cannot account for the reduced transcription of type 2 promoters in PE cells. Because TFIIIBbeta is not required for the expression of type 3 promoters, other components must necessarily be involved, and our results show that U6 transcription can significantly be reactivated by TFIIIC1. By employing a variant type 3 promoter construct, which essentially requires a mutant form of TBP (TBP-DR2), we show that TBP is not limiting in PE extracts. The partial purification of pol III transcription factors from PE and EC cells revealed that TFIIIC2 activity could be purified from both cell types, whereas TFIIIC1 activity was dramatically reduced in extracts from PE cells.