We have investigated the retinoic acid-mediated activation of the transcriptional regulator HNF-3 beta during differentiation of mouse F9 embryonal carcinoma cells. Using gel shifts, HNF-3 beta DNA binding activity was clearly detected in differentiated cells, while F9 stem cells were devoid of this activity. We also demonstrated that HNF-3 beta mRNA is specific for differentiated cells. Addition of retinoic acid to F9 stem cells results in delayed activation of HNF-3 beta mRNA which can be detected 1-2 days after the initiation of differentiation. HNF-3 beta mRNA concentrations are maximal at approximately 4 days postdifferentiation and stay at elevated levels for at least 4 additional days. Nuclear run-on experiments clearly show that HNF-3 beta is activated at the level of transcriptional initiation, suggesting that the increases of beta-specific DNA binding activity and mRNA concentration are merely a reflection of this activation mechanism. F9 cells can give rise to three distinct differentiated cell types, visceral endoderm, parietal endoderm, and primitive endoderm, and we have observed HNF-3 beta stimulation during the formation of all three tissues. HNF-3 beta stimulation upon visceral endoderm differentiation is accompanied by the activation of HNF-3 target genes such as transthyretin, suggesting that HNF-3 beta is involved in the developmental activation of this gene. In contrast, HNF-3 beta target genes in parietal and primitive endoderm have yet to be identified. However, the stimulation of HNF-3 beta during primitive endoderm formation, which is an extremely early event during murine embryogenesis, points toward a role for the factor in crucial determination processes that occur early during development.