Rex1 (zfp42) is a zinc finger protein expressed primarily in undifferentiated stem cells, both in the embryo and the adult. Upon all-trans retinoic acid induced differentiation of murine embryonic stem (ES) cells, Rex1 mRNA levels decrease several fold. To characterize the function(s) of Rex1 more extensively, we generated Rex1 double knockout ES cell lines. The disruption of the Rex1 gene enhanced the expression of ectoderm, mesoderm, and endoderm markers as compared to wild-type (Wt) cells. We propose that Rex1 acts to reduce retinoic acid induced differentiation in ES cells. We performed microarray analyses on Wt and Rex1-/- cells cultured in the presence or absence of LIF to identify potential Rex1 targets. We also evaluated gene expression in a Wt line that overexpresses Rex1 and in a Rex1-/- line in which Rex1 expression was restored. These data, taken together, suggest that Rex1 influences differentiation, cell cycle regulation, and cancer progression.