Undifferentiated cells derived from the inner cell mass of mouse blastocysts have been used to develop an in vitro screen for teratogenic potential. Differentiation of mouse embryonic stem (ES) cells is inhibited by leukaemia inhibitory factor (LIF). Removal of LIF allows the cells to differentiate into a morphologically distinct endodermal-type cell. Colonies of ES cells are maintained from which cells can be harvested daily, and these cells, when washed free of LIF, form a population of differentiating cells on which the effects of chemicals can be tested. The protocol used is similar to that of the micromass test, with differentiating ES cells substituted for rat primary embryonic cells, and the effects of 25 compounds have been investigated in a blind trial. The four potent teratogens were all positive: false negatives occurred only among moderate and weak teratogens. Seven of the 10 non-teratogens were negative. Results were generally similar to those reported for the micromass test. In the light of these findings, and with appropriate multicentre validation, the stem-cell test may be suitable for hazard labelling of industrial chemicals. It has the advantage over existing in vitro tests that it uses a propagated cell line-it does not involve the use of animals.