Embryonic stem (ES) cells have been known to differentiate into various progenitor cells. In this study, we investigated the differentiation capacity of mouse ES cells into pancreatic hormone-secreting cells, and insulin-secreting cells. ES cells were cultured in Dulbecco's modified Eagle medium (DMEM) after removal of leukemia inhibitory factor (LIF) for 3 days and then transferred in DMEM supplemented with retinoic acid or activin A. When the culture of embryoid bodies (EBs) derived from ES cells in DMEM added with activin A (2 × 10^-9 M or 2 × 10^-10 M) for 5 days was performed, endoderm marker genes, GATA4, Sox17 and Foxa2 were expressed in the EBs. However, at 6 days of culture, expression of Sox17 was not observed. When EBs were cultured with activin A (2 × 10^-9 M) for 6 days, and followed by 6 days of culture with retinoic acid (10^-6 M), expression of the pancreatic cell marker genes, GATA4 and Fxa2, were continued, and pancreatic islet genes, insulins 1 and 2, glucagons and somatostatin, were expressed from 5 days of culture. Immunohistochemistrical analysis gave results similar to RT-PCR. We consider this differentiation method for definitive endoderm production and pancreatic hormonesecreting cells, by using activin A and, retinoic acid is considered to be effective.