Mouse embryonic stem cells (ESCs) have the potential to differentiate into germ cells (GCs) in vivo and in vitro. Interestingly, XY ESCs can give rise to both male and female GCs in culture, irrespective of the genetic sex. Recent studies showed that ESC-derived primordial GCs contributed to functional gametogenesis in vivo; however, in vitro differentiation techniques have never succeeded in generating mature oocytes from ESCs due to cryptogenic growth arrest during the preantral follicle stages of development. To address this issue, a mouse ESC line, capable of producing follicle-like structures (FLSs) efficiently, was established to investigate their properties using conventional molecular biological methods. The results revealed that the ESC-derived FLSs were morphologically similar to ovarian primary-to-secondary follicles but never formed an antrum; instead, the FLSs eventually underwent abnormal development or cell death in culture, or formed teratomas when transplanted under the kidney capsule in mice. Gene expression analyses demonstrated that the FLSs lacked transcripts for genes essential to late folliculogenesis, including gonadotropin receptors and steroidogenic enzymes, whereas some other genes were overexpressed in FLSs compared to the adult ovary. The E-Cadherin protein, which is involved in cell-to-cell interactions, was also expressed ectopically. Remarkably, it was seen that oocyte-like cells in the FLSs exhibited androgenetic genomic imprinting, which is ordinarily indicative of male GCs. Although the FLSs did not express male GC marker genes, the DNA methyltransferase, Dnmt3L, was expressed at an abnormally high level. Furthermore, the expression of sex determination factors was ambiguous in FLSs as both male and female determinants were expressed weakly. These data suggest that the developmental dysfunction of the ESC-derived FLSs may be attributable to aberrant gene expression and genomic imprinting, possibly associated with uncertain sex determination in culture.