Embryonal carcinoma cells, the stem cells of teratocarcinomas, usually undergo extensive differentiation in vivo and in vitro to a wide variety of cell types. There exist, however, several embryonal carcinoma cell lines that have almost completely lost the capacity to differentiate, so that the cells are propagated primarily as the stem cells. Using one such cell line, F9, we have found that retinoic acid at concentrations as low as 10(-9) M induces multiple phenotypic changes in the cultures in vitro. These changes include morphological alteration at the resolution of the light microscope, elevated levels of plasminogen activator production, sensitivity to cyclic AMP compounds and increased synthesis of collagen-like proteins. The nature of these changes, as well as their independence of the continued presence of retinoic acid, are consistent with the proposition that retinoic acid induces differentiation of embryonal carcinoma cells into endoderm.