We wish to identify genes involved in mediating early lineage decisions in the mouse embryo. F9 teratocarcinoma cells treated with retinoic acid (RA) in suspension culture develop into embryoid bodies (EBs) with an outer layer of visceral endoderm. In order to identify genes that are involved in establishing this extraembryonic endoderm lineage we have employed a PCR-based approach using cDNAs from early EBs as templates. PCR reactions were performed with degenerate oligonucleotide primers coding for the highly conserved regions of the homeodomains of the Drosophila Antennapedia, bicoid, and zerknüllt proteins. Among the PCR products were representatives of previously identified mouse genes, including Hox-A5 (1.3), A1 (1.6), A9 (1.7), B8 (2.4), B2 (2.8), C8 (3.1), and D12 (4.7). Whole mount in situ hybridization analysis, performed to examine the temporal and spatial distribution of transcripts, suggests a possible role for the Hox-D12 gene during endoderm differentiation in F9 EBs. Whereas the expression patterns of several other homeobox genes are essentially uniform throughout the aggregates, Hox-D12 expression is restricted to the outer surface of early EBs at a time when lineage decisions may be occurring. In order to establish the relationship between the Hox-D12 expression pattern and the role of RA in inducing F9 EB differentiation, we examined PSA-1 EBs that differentiate in the absence of added RA. PSA-1 EBs show similar temporal and spatial localization of Hox-D12 when compared to F9 EBs. These data suggest that the pattern of Hox-D12 expression correlates with endoderm differentiation and not with RA treatment and point to a possible role for homeobox-containing genes during the early stages of mouse embryogenesis.