We present evidence demonstrating that the liver-enriched transcription factor HNF-3 alpha is activated upon retinoic acid-induced differentiation of mouse F9 embryonal carcinoma cells. We have detected increases in the DNA binding activity and mRNA level of HNF-3 alpha. Both are reflections of the actual activation mechanism at the level of transcriptional initiation, which we showed with the help of HNF-3 alpha promoter constructs. Time course studies clearly show that HNF-3 alpha activation is a transient event. Employing Northern blots, HNF-3 alpha mRNA can be detected between 16 and 24 hours post-differentiation, reaches its zenith at approximately 1 day, and then declines to virtually undetectable levels. F9 cells can give rise to three distinct differentiated cell types; visceral endoderm, parietal endoderm, and primitive endoderm. We have clearly shown that HNF-3 alpha stimulation occurs upon primitive endoderm formation. In addition, the transcription factor is also activated during the induction of cell lineages that give rise to parietal and visceral endoderm. HNF-3 alpha stimulation upon visceral endoderm differentiation is accompanied by the activation of HNF-3 target genes such as transthyretin, suggesting that HNF-3 alpha is involved in the developmental activation of this gene. In contrast, HNF-3 alpha target genes in parietal and primitive endoderm have yet to be identified. However, the stimulation of HNF-3 alpha during primitive endoderm formation, which is an extremely early event during murine embryogenesis, points towards a role for the factor in crucial determination processes that occur early during development.