To understand the mechanisms that control the differentiation of uncommitted mesoderm precursors into haematopoietic stem cells (HSCs) and the activation of haematopoiesis, we conducted a study to identify genes expressed at the earliest stages of both in vivo and in vitro haematopoietic development. Our strategy was to utilize Differential Display by means of the Polymerase Chain Reaction (DD-PCR) to compare patterns of gene expression between mRNA populations representing different levels of haematopoietic activity obtained from the mouse embryo, embryoid bodies (EBs) and mouse cell lines. We report the molecular cloning of two groups of genes expressed in the yolk sac: a group of genes expressed in the day-8.5 yolk sac at higher levels than in the day-8.5 embryo proper and up-regulated during EB development, and another group of day-8.5 yolk sac genes not expressed in the day-8.5 embryo proper or in EBs. Specifically, we describe the molecular cloning of the first nucleobase permease gene to be found in vertebrates, yolk sac permease-like molecule 1 (Ysp11). The Ysp11 gene has the unique property of encoding both intracellular, transmembrane and extracellular protein forms, revealing novel aspects of nucleotide metabolism that may be relevant during mammalian development.