The developmental potential of embryonic stem (ES) cells versus 3.5 day inner cell mass (ICM) was compared after aggregation with normal diploid embryos and with developmentally compromised tetraploid embryos. ES cells were capable of colonizing somatic tissues in diploid aggregation chimeras but less efficiently than ICMs of the same genotype. When ICM in equilibrium with tetraploid and ES in equilibrium with tetraploid chimeras were made, the newborns were almost all completely ICM- or ES-derived, as judged by GPI isozyme analysis, but tetraploid cells were found in the yolk sac endoderm and trophectoderm lineage. Investigation of ES contribution in 13.5 day ES in equilibrium with tetraploid chimeras by DNA in situ hybridization confirmed the complete tetraploid origin of the placenta (except the fetal blood and blood vessels) and the yolk sac endoderm. However, the yolk sac mesoderm, amnion and fetus contained only ES-derived cells. ES-derived newborns failed to survive after birth, although they had normal birthweight and anatomically they appeared normal. This phenomenon remains unexplained at the moment. The present results prove that ES cells are able to support complete fetal development, resulting in ES-derived newborns, and suggest a useful route for studying the development of genetically manipulated ES cells in all fetal lineages.