Cultured murine F9 teratocarcinoma stem cells resemble pluripotent stem cells of the inner cell mass of the mouse blastocyst and, depending upon their treatment, can be induced to differentiate along the primitive endoderm, the parietal endoderm (PE), or the visceral endoderm (VE) pathway. The Rex-1 gene encodes a zinc finger family transcription factor which is expressed at high levels in undifferentiated F9 stem cells, embryonic stem cells, and in other types of stem cells. To examine whether the Rex-1 protein plays a role in F9 cell differentiation, homologous recombination was employed to generate F9 cell lines which lack both alleles of Rex-1. F9 wild type cells in monolayer culture require both retinoic acid and cyclic AMP analogs to differentiate into PE, whereas the F9 Rex-1(-/-) cells differentiate into PE, as assessed by several molecular markers, including thrombomodulin and laminin B1, in the presence of RA alone. The F9 Rex-1(-/-) cells do not completely differentiate into VE after RA treatment in aggregate culture; they do not express alpha-fetoprotein, a definitive marker of VE differentiation. These results indicate that the Rex-1 transcription factor regulates the differentiation of F9 stem cells along several distinct cell lineages found in the early embryo.