The transcription factors of the hepatocyte nuclear factor 3 (HNF3) family, which are active in the liver, are expressed early during endoderm differentiation. To study their involvement in early murine development, we examined their role in embryonic stem (ES) cells. HNF3alpha or HNF3beta mRNA transcripts were not detected in ES cells before differentiation, and only low levels of HNF3beta mRNA were detected at a late stage of differentiation of ES cells to embryoid bodies (EB) (20 days after induction of differentiation). To examine the consequences of overexpressing HNF3alpha or -beta in ES cells, we transfected the two genes into these cells and determined the levels of expression of tissue-specific genes during EB differentiation. Specifically, we examined expression of albumin, cystic fibrosis transmembrane conductance regulator (CFTR), phosphoenolpyruvate carboxykinase (PEPCK), alpha1-antitrypsin, transthyretin, zeta-globin, and neurofilament 68kd as markers for different cell lineages. Overexpression of HNF3beta (and to a lesser extent of HNF3alpha) induced the expression of genes associated with endodermal lineage, namely, the genes for CFTR and albumin, but did not induce the expression of genes involved in late endoderm differentiation, such as the genes for PEPCK and alpha1-antitrypsin. Moreover, expression of HNF1beta was highly induced in HNF3-overexpressing cells, while expression of HNF1alpha and HNF4 was only mildly induced in these cells. Therefore, HNF3alpha and -beta seem to be involved in early endoderm differentiation of ES cells and together with other developmental factors are apparently needed for the induction of the endodermal lineage in vivo.