Mouse embryonic stem (ES) cells were transfected with a plasmid composed of an E. coli lacZ gene fused to 1.8 kb of rat neuron-specific enolase (NSE) promoter sequences. While this reporter construct had been shown previously to function exclusively in postmitotic neurons and neuro-endocrine cells of transgenic mice, stably transfected ES cell clones unexpectedly displayed beta-galactosidase (beta-Gal) activity in the undifferentiated state. This transcriptional activity of the heterologous NSE promoter was confirmed by the identification of endogenous NSE mRNA in undifferentiated ES cells, mouse morulae and blastocysts. NSE protein, however, could not be found in undifferentiated ES cells. Interestingly, in ES cells which were cultured for 7 days under differentiation conditions in vitro, beta-Gal activity decreased to basal levels consistent with the parallel down-regulation of endogenous NSE mRNA. In contrast, prolonged culture of ES cells under differentiation conditions led to the reappearance of NSE mRNA and beta-Gal activity after 17 days. Significant increases in beta-Gal activity were also observed in ES cells which were cultured either on dishes coated with attachment factors such as laminin and gelatin or in the presence of nerve growth factor (NGF). These results suggest that i) transcriptional control mechanisms regulating neuronal gene expression are present at early developmental stages in the mouse and ii) ES cells provide a useful in vitro model system for the analysis of developmentally regulated cellular and molecular events coupled to neuron-specific enolase promoter activity.