The two alleles of the 30 kDa TATA-binding protein associated factor (TAF(II)30) gene, have been targeted by homologous recombination in murine F9 embryonal carcinoma cells and subsequently disrupted using a Cre recombinase-loxP strategy. The TAF(II)30-null cells are not viable, but are rescued by the expression of human TAF(II)30. Cells lacking TAF(II)30 are blocked in G(1)/G(0) phase of the cell cycle and undergo apoptosis. In agreement with the G(1) arrest phenotype, the expression of cyclin E is impaired and the retinoblastoma protein is hypophosphorylated in the TAF(II)30-null cells. Interestingly, retinoic acid (RA) treatment prevented TAF(II)30-null cell death and induced primitive endodermal differentiation. In contrast, the RA- and cAMP-induced parietal endodermal differentiation was impaired in the TAF(II)30-null cells. Thus, TAF(II)30 is not indispensable for class II gene transcription in general, but seems to be required for the expression of a subset of genes.