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In a unique serum- and protein-free chemically defined in vitro culture model of postimplantation mammalian development the epidermis differentiates regularly, although the differentiation of other tissues is impaired due to the lack of the serum. The present study in that model was done to estimate more carefully the degree of epidermal differentiation in defined media supplemented with some growth- or differentiation-stimulating substances. The main objective was to discover by grafting in vivo to the richer environment whether simple protein-free culture conditions restrict an inherent embryonic potential for differentiation of skin appendages. Embryonic parts of E9.5 gastrulating Fischer rat embryos were cultivated for 2 weeks in the protein-free Eagle’s minimum essential medium supplemented with holotransferrin, apotransferrin, insulin and/or Na2SeO3 and in controls cultivated in protein-free medium or in serum-supplemented medium. In all experiments there was a high incidence of differentiation of the epidermis. A high level of epidermal differentiation was confirmed for the first time at the ultrastructural level. A well-differentiated cornified layer and cells connected with desmosomes containing keratohyaline masses and cytokeratin filaments were found. A strong immunohistochemical signal for the proliferating cell nuclear antigen was always detected in the basal layer of the epidermis showing that those cells were still able to proliferate. Finally, embryos precultivated for 1 or 2 weeks in the protein-free medium and media supplemented with apotransferrin or serum were grafted under the kidney capsule for an additional 2 weeks. It was discovered that even after spending 2 weeks in the simple protein-free medium in vitro, embryos retained their developmental potential for differentiation of skin appendages (hair and sebaceous glands).