We investigated the ability of a genetically altered embryonic stem (ES) cell line to promote endodermal differentiation toward hepatocytes in vitro by transfecting the hepatocyte nuclear factor-3beta (HNF-3beta) gene. Parental and HNF-3beta-transfected ES cells were initiated toward differentiation in embryoid bodies (EBs) for 5 days and the resulting EBs were transferred to an attached culture system. Albumin production was observed using an immuno-cytochemical method 7 days after induction of differentiation in almost all differentiating HNF-3beta-transfected ES cells, whereas scant immuno-reactivity against albumin was found on the same day in the cultures of differentiating parental ES cells. An analysis using a reverse transcriptase polymerase chain reaction revealed the HNF-4alpha expression in the HNF-3beta-transfected ES cells and also demonstrated that the expression of endodermal and hepatocyte-related markers, such as transthyretin, alpha-fetoprotein, albumin, alpha-1 antitrypsin, tryptophan-2,3-dioxygenase and phosphoenol-pyruvate carboxykinase, could be observed at an early stage in the outgrowths of HNF-3beta-transfected ES cells compared to the parental ES cells. These results suggest that HNF-3beta-transfected ES cells may be useful for the efficient induction of hepatocytes in vivo.