Vertebrate germ layer development is an intricately interwoven process with the organism operating as an integrated whole. To examine these processes we have used embryonic stem (ES) cell in vitro differentiation in a serum-free, chemically defined medium (CDM). In CDM, ES cells differentiate as embryoid bodies to neuroectoderm with upregulation of pax-6, without commensurate expression of Brachyury. In the presence of Activin A, pax-6 and Brachyury mRNAs are readily detectable, suggestive of both neuroectoderm and mesoderm formation, while in the presence of BMP-4 a process resembling primitive streak formation at the molecular level occurs. Neuroectoderm development in CDM alone is consistent with the view that this process can occur by default, as reported in Xenopus, due to the absence or sequestration of mesoderm-inducing factors. Additionally, these data show that BMP-4 alone is capable of instigating a process resembling primitive streak formation in ES cells and possibly in vivo. Copyright 1999 Academic Press.