Embryonic stem (ES) cells can be differentiated into insulin-producing cells by conditioning the culture media. However, the number of insulin-expressing cells and amount of insulin released is very low. Glucose-dependent insulinotropic polypeptide (GIP) enhances the growth and differentiation of pancreatic b-cells. This study examined the potential of the stable analogue GIP(LysPAL 16 ) to enhance the differentiation of mouse ES cells into insulin-producing cells using a five-stage culturing strategy. Semi-quantitative PCR indicated mRNA expression of islet development markers (nestin, Pdx1, Nkx6.1, Oct4), mature pancreatic b-cell markers (insulin, glucagon, Glut2, Sur1, Kir6.1) and the GIP receptor gene GIP-R in undifferentiated (stage 1) cells, with increasing levels in differentiated stages 4 and 5. IAPP and somatostatin genes were only expressed in differentiated stages. Immunohistochemical studies confirmed the presence of insulin, glucagon, somatostatin and IAPP in differentiated ES cells. After supplementation with GIP(LysPAL 16 ), ES cells at stage 4 released insulin in response to secretagogues and glucose in a concentration-dependent manner, with 35-100% increases in insulin release. Cellular C-peptide content also increased by 45% at stages 4 and 5. We conclude that the stable GIP analogue enhanced differentiation of mouse ES cells towards a phenotype expressing specific b-cell genes and releasing insulin.