Embryonic stem (ES) cell lines provide a unique tool for introducing targeted or random genetic alterations through gene replacement, insertional mutagenesis, and gene addition because they offer the possibility for in vitro selection for the desired, but extremely rare, recombinant genotypes. So far only mouse blastocyst embryos are known to have the competence to give rise to such ES cell lines. We recently have established a stable cell line (Mes1) from blastulae of the medakafish (Oryzias latipes) that shows all characteristics of mouse ES cells in vitro. Here, we demonstrate that Mes1 cells also have the competence for chimera formation; 90% of host blastulae transplanted with Mes1 cells developed into chimeric fry. This high frequency was not compromised by cryostorage or DNA transfection of the donor cells. The Mes1 cells contributed to numerous organs derived from all three germ layers and differentiated into various types of functional cells, most readily observable in pigmented chimeras. These features suggest the possibility that Mes1 cells may be a fish equivalent of mouse ES cells and that medaka can be used as another system for the application of the ES cell technology.