Pluripotent embryonic stem cells hold a great promise as an unlimited source of tissue for treatment of chronic diseases such as Type 1 diabetes. Herein, we describe a protocol using all-trans-retinoic acid, basic fibroblast growth factor and dibutyryl cAMP (DBcAMP) in the absence of embryoid body formation, for differentiation of murine embryonic stem cells into definitive endoderm that may serve as pancreatic precursors. The produced cells were analyzed by quantitative PCR, immunohistochemistry and static insulin release assay for markers of trilaminar embryo, and pancreas. Differentiated cells displayed increased Sox17 and Foxa2 expression consistent with definitive endoderm production. There was minimal production of Sox7, an extraembryonic endoderm marker, and Oct4, a marker of pluripotency. There was minimal mesoderm or neuroectoderm formation based on expression levels of the markers brachyury and Sox1, respectively. Various assays revealed that the cell clusters generated by this protocol express markers of the pancreatic lineage including insulin I, insulin II, C-peptide, PDX-1, carboxypeptidase E, pan-cytokeratin, amylase, glucagon, PAX6, Ngn3 and Nkx6.1. This protocol using all-trans-retinoic acid, DBcAMP, in the absence of embryoid bodies, generated cells that have features of definitive endoderm that may serve as pancreatic endocrine precursors.