The urinary bladder and associated tract are lined by the urothelium, a transitional epithelium that acts as a specialized permeability barrier that protects the underlying tissue from urine via expression of a highly specific group of proteins known as the uroplakins (UP). To date, our understanding of the developmental processes responsible for urothelial differentiation has been hampered due to the lack of suitable models. In this study, we describe a novel in vitro cell culture system for derivation of urothelial cells from murine embryonic stem cells (ESCs) following cultivation on collagen matrices in the presence all trans retinoic acid (RA). Upon stimulation with micromolar concentrations of RA, ESCs significantly downregulated the pluripotency factor OCT-4 but markedly upregulated UP1A, UP1B, UP2, UP3A, and UP3B mRNA levels in comparison to naïve ESCs and spontaneously differentiating controls. Pan-UP protein expression was associated with both p63- and cytokeratin 20-positive cells in discrete aggregating populations of ESCs following 9 and 14 days of RA stimulation. Analysis of endodermal transcription factors such as GATA4 and GATA6 revealed significant upregulation and nuclear enrichment in RA-treated UP2-GFP+ populations. GATA4−/− and GATA6−/− transgenic ESC lines revealed substantial attenuation of RA-mediated UP expression in comparison to wild type controls. In addition, EMSA analysis revealed that RA treatment induced formation of transcriptional complexes containing GATA4/6 on both UP1B and UP2 promoter fragments containing putative GATA factor binding sites. Collectively, these data suggest that RA mediates ESC specification toward a urothelial lineage via GATA4/6–dependent processes.