Embryonic stem (ES) cells are typically derived from the inner cell mass of the preimplantation blastocyst and can both self-renew and differentiate into all the cells and tissues of the embryo. Because they are pluripotent, ES cells have been used extensively to analyze gene function in development via gene targeting. The embryonic stem cell is also an unsurpassed starting material to begin to understand a critical, largely inaccessible period of development. If their differentiation could be controlled, they would also be an important source of cells for transplantation to replace cells lost through disease or injury or to replace missing hormones or genes. Traditionally, ES cells have been differentiated in suspension culture as embryoid bodies, named because of their similarity to the early postimplantation-staged embryo. Unlike the pristine organization of the early embryo, differentiation in embryoid bodies appears to be largely unpatterned, although multiple cell types form. It has recently been possible to separate the desired cell types from differentiating ES cells in embryoid bodies by using cell-type-restricted promoters driving expression of either antibiotic resistance genes or fluorophores such as EGFP. In combination with growth factor exposure, highly differentiated cell types have successfully been derived from ES cells. Recent technological advances such as RNA interference to knock down gene expression in ES cells are also producing enriched populations of cells and elucidating gene function in early development.