Using the embryonic stem (ES) cell/chimera approach, we have studied the activity of the mouse retinoic acid receptor β2 (mRARβ2) promoter during ES cell differentiation and during embryonic development. Stable ES clones were isolated after introduction of a 1.8 kb mRARβ2-lacZ expression cassette. LacZ expression in these stable clones was specifically induced by retinoic acid (RA) in a similar fashion as the endogenous RARβ2 gene. Following introduction of three different ES clones into blastocysts, an integration-independent mRARβ2-lacZ expression pattern was obtained in chimeric embryos similar to that described by in situ hybridization and transgenic studies. Moreover, mRARβ2-lacZ expression was also detected at some additional sites not described before, e.g. body wall, ureter, mesonephric duct and optic stalk. Maternal RA administration at 8.5 days of pregnancy extended lacZ expression to more anterior and posterior regions. Transgenic mice were generated from germ-line transmission of the transfected ES cells; expression pattern and changes in expression upon RA induction in these transgenic embryos were identical to those in chimeric embryos. We conclude that by using the ES/chimera approach, the proximal 1.8 kb of the mRARβ2 promoter produces a reliable and reproducible expression pattern of the reporter gene, and that the ES cell/chimera approach is invaluable for the study of gene expression and regulation.