We are interested in defining the cell-cell and cell-matrix interactions that help direct the differentiation of extraembryonic endoderm in the peri-implantation mouse embryo. At the blastocyst stage the mouse embryo consists of an outer layer of trophectoderm surrounding the fluid-filled blastocoel cavity and an eccentrically located inner cell mass. On the free surface of the inner cell mass, facing the blastocoel cavity, a layer of primitive endoderm forms. Primitive endoderm then generates two distinct cell types; parietal endoderm (PE) which migrates along the inner surface of the trophectoderm and secretes large amounts of basement membrane components as well as tissue-type plasminogen activator (tPA), and visceral endoderm (VE), a columnar epithelial layer characterized by tight junctions, microvilli, and the synthesis and secretion of α-fetoprotein. As these events occur after implantation, we have turned to the F9 teratocarcinoma system as an in vitro model for examining the differentiation of these cell types. When F9 cells are treated in monolayer with retinoic acid plus cyclic-AMP, they differentiate into PE. In contrast, when F9 cells are treated in suspension with retinoic acid, they form embryoid bodies (EBs) which consist of an outer layer of VE and an inner core of undifferentiated stem cells. In addition, we have established that when VE containing embryoid bodies are plated on a fibronectin coated substrate, PE migrates onto the matrix and this interaction is inhibited by RGDS as well as antibodies directed against the β1 integrin subunit. This transition is accompanied by a significant increase in the level of tPA in the PE cells. Thus, the outgrowth system provides a spatially appropriate model for studying the differentiation and migration of PE from a VE precursor.