We developed a method to generate dendritic cells (DCs) from mouse embryonic stem (ES) cells. We cultured ES cells for 10 days on feeder cell layers of OP9, in the presence of granulocyte-macrophage colony-stimulating factor in the latter 5 days. The resultant ES cell–derived cells were transferred to bacteriologic Petri dishes without feeder cells and further cultured. In about 7 days, irregularly shaped floating cells with protrusions appeared and these expressed major histocompatibility complex class II, CD11c, CD80, and CD86, with the capacity to stimulate primary mixed lymphocyte reaction (MLR) and to process and present protein antigen to T cells. We designated them ES-DCs (ES cell–derived dendritic cells), and the functions of ES-DCs were comparable with those of DCs generated from bone marrow cells. Upon transfer to new dishes and stimulation with interleukin-4 plus tumor necrosis factor α, combined with anti-CD40 monoclonal antibody or lipopolysaccharide, ES-DCs completely became mature DCs, characterized by a typical morphology and higher capacity to stimulate MLR. Using an expression vector containing the internal ribosomal entry site–puromycinN-acetyltransferase gene or a Cre-lox–mediated exchangeable gene-trap system, we could efficiently generate ES cell transfectants expressing the products of introduced genes after their differentiation to DCs. ES-DCs expressing invariant chain fused to a pigeon cytochrome C epitope presented the epitope efficiently in the context of E^k. We primed ovalbumin (OVA)–specific cytotoxic T lymphocytes in vivo by injecting mice with ES-DCs expressing OVA, thus demonstrating immunization with ES-DCs genetically engineered to express antigenic protein. The methods may be applicable to immunomodulation therapy and gene-trap investigations of DCs.