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Objective: To investigate the mechanism and regulation of differentiation from embryonic stem (ES) cells into biliary epithelium (BE) cells and to find a new source f of BE cells for liver engineering., Methods: ES cells of BALB/c mice (BALB/c-ES) and ES cells of mice of the line 129 (D3-ES) were cultured in the medium without LIF for 5 days with the result that embryoid bodies (EBs) were developed from the ES cells. For directional differentiation, the EBs were plated onto a 24-well gelatin-coated tissue culture dish and some growth factors, such as transforming growth factor (TGF), acid fibroblast growth factor (aFGF), hepatocyte growth factor (HGF) and epidermal growth factor (EGF) etc were added into the medium successively in the experiment group but not in the control group. The differentiation status was observed by inversion microscope dynamically. The BE cell markers, such as cytokeratin 7 (CK7), cytokeratin 19 (CK19) and gamma-glutamyltransferase (GGT) were detected by immunocytochemistry (ICC) and histochemistry., Results: After the culture for 5 days the ES cells developed into many EBs in the medium without LIF. In the EBs cells clusters, many circular structures appeared on the differentiation day 10. On the days 10 and 13 ICC, CK7 and CK19 began to be expressed respectively. GGT began to be expressed at day 10. CK7, CK19 and GGT were also expressed in the ES cells of the control group, however, appeared remarkably later., Conclusion: ES cells can differentiate into BE cells under specific culture condition and the action of growth factors. Such ES cell differentiating system can provide BE cells and may serve as a good new source of differentiated cell types for liver engineering.