Neurogenin3 is a member of the basic helix-loop-helix ('bHLH') family of transcription factors. It plays a crucial role in the commitment of embryonic endoderm into the pancreatic differentiation programme. This factor is considered to act upstream of a cascade of other transcription factors, leading to the fully differentiated endocrine phenotype. Direct observation of the sequential activation of these factors starting from Neurogenin3 had never been demonstrated. By using retinoic acid-derived-endoderm F9 cells as a model, the present study indicates that the ectopic expression of Neurogenin3 is able to start the differentiation pathway of endocrine pancreas. Neurogenin3 triggers the expression of several pancreatic transcription factors following a well defined temporal activation sequence. By reverse transcriptase PCR, immunohistochemistry and RIA, it is shown that stable transfected cells are able to form embryod bodies that produce insulin in response to glucose stimulation. This is the first report of a differentiation event induced by the ectopic expression of a transcription factor in embryonic pluripotent stem cells.