The ability to generate multiple cell types from embryonic stem (ES) cell in culture offers unprecedented opportunities to investigate the mechanisms that regulate the earliest stages of lineage commitment that lead to the development of the primary germ layers;ectoderm, mesoderm and endoderm. In addition, ES cells offer a novel and potentially unlimited supply of cells for transplantation for the treatment of a broad range of diseases. For the basic biological and therapeutic potential of the ES cell system to be fully realized, it is essential to first define the mechanisms that regulate lineage induction and tissue specification in this model. The goal of this proposal is to investigate the mechanisms that regulate endoderm induction and pancreatic specification in both mouse and human ES cell differentiation cultures. The overall approach is to focus the experiments in each of the first three aims on three specific stages of development. In the first aim, we will use a mouse ES cell line with the GFP cDNA targeted to the brachyury locus and human CD4 targeted to the Foxa2 (HNF3() locus to define the signaling pathways required for the earliest stage of development, the establishment of a primitive streak-like population. Induction of a population comparable to the primitive streak represents the first step in the development of definitive endoderm. The focus of the second aim is to determine what factors regulate the development of endoderm and Pdx1+ pancreatic progenitors from the primitive streak-like cells. The third aim will define the conditions necessary for the maturation of Pdx1+ progenitors to functional insulin secreting cells. In the fourth aim, we will translate the findings from the studies with mouse ES cells to the human system. Approaches comparable to those used for differentiation of the mouse ES cells will be used to establish conditions necessary for the development of primitive streak-like cells, endoderm, pancreatic progenitors and insulin-secreting cells from human ES cells. For these experiments we will use the following human ES cell lines: ES02, ES03, ES04, TE-03, TE-06, MI01, UC01, WA01, WA07, WA09, BG02 and BG03. The outcome of these experiments will provide new insights into the regulation of endoderm induction and pancreatic specification in the ES cell differentiation model