The Mixl1 gene encodes a homeodomain transcription factor that is required for normal mesoderm and endoderm development in the mouse. We have examined the consequences of enforced Mixl1 expression during mouse embryonic stem cell (ESC) differentiation. We show that three independently derived ESC lines constitutively expressing Mixl1 (Mixl1(C) ESCs) differentiate into embryoid bodies (EBs) containing a higher proportion of E-cadherin (E-Cad)(+) cells. Our analysis also shows that this differentiation occurs at the expense of hematopoietic mesoderm differentiation, with Mixl1(C) ESCs expressing only low levels of Flk1 and failing to develop hemoglobinized cells. Immunohistochemistry and immunofluorescence studies revealed that Mixl1(C) EBs have extensive areas containing cells with an epithelial morphology that express E-Cad, FoxA2, and Sox17, consistent with enhanced endoderm formation. Luciferase reporter transfection experiments indicate that Mixl1 can transactivate the Gsc, Sox17, and E-Cad promoters, supporting the hypothesis that Mixl1 has a direct role in definitive endoderm formation. Taken together, these studies suggest that high levels of Mixl1 preferentially allocate cells to the endoderm during ESC differentiation.