Monolayer cultures of F9 teratocarcinoma stem cells and P19 stem cells differentiate into endoderm, and fibroblast-like cells, respectively, when treated with retinoic acid. We demonstrate that this differentiation is associated with a large increase (greater than 40-fold) in the activity of an enzyme, prolyl-4-hydroxylase, involved in the posttranslational modification of collagens. This large increase in prolyl-4-hydroxylase activity occurs between 42 and 72 h after retinoic acid addition, and is associated with an increased amount of immunoprecipitable prolyl hydroxylase enzyme. This enzyme should be a useful marker for certain differentiated cell types produced during differentiation of teratocarcinoma stem cell lines.