The establishment of the primitive streak and its derivative germ layers, mesoderm and endoderm, are prerequisite steps in the formation of many tissues. To model these developmental stages in vitro, an ES cell line was established that expresses CD4 from the foxa2 locus in addition to GFP from the brachyury locus. A GFP-Bry(+) population expressing variable levels of CD4-Foxa2 developed upon differentiation of this ES cell line. Analysis of gene-expression patterns and developmental potential revealed that the CD4-Foxa2(hi)GFP-Bry(+) population displays characteristics of the anterior primitive streak, whereas the CD4-Foxa2(lo)GFP-Bry(+) cells resemble the posterior streak. Using this model, we were able to demonstrate that Wnt and TGF-beta/nodal/activin signaling simultaneously were required for the generation of the CD4-Foxa2(+)GFP-Bry(+) population. Wnt or low levels of activin-induced a posterior primitive streak population, whereas high levels of activin resulted in an anterior streak fate. Finally, sustained activin signaling was found to stimulate endoderm commitment from the CD4-Foxa2(+)GFP-Bry(+) ES cell population. These findings demonstrate that the early developmental events involved in germ-layer induction in the embryo are recapitulated in the ES cell model and uncover insights into the signaling pathways involved in the establishment of mesoderm and endoderm.