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Driving specific differentiation pathways in multipotent stem cells is a main goal of cell therapy. Here we exploited the differentiating potential of  Xenopus  animal cap embryonic stem (ACES) cells to investigate the factors necessary to drive multipotent stem cells toward retinal fates. ACES cells are multipotent, and can be diverged from their default ectodermal fate to give rise to cell types from all three germ layers. We found that a single secreted molecule, Noggin, is sufficient to elicit retinal fates in ACES cells. Reverse‐transcription polymerase chain reaction, immunohistochemistry, and in situ hybridization experiments showed that high doses of Noggin are able to support the expression of terminal differentiation markers of the neural retina in ACES cells in vitro. Following in vivo transplantation, ACES cells expressing high Noggin doses form eyes, both in the presumptive eye field region and in ectopic posterior locations. The eyes originating from the transplants in the eye field region are functionally equivalent to normal eyes, as seen by electrophysiology and c‐fos expression in response to light. Our data show that in  Xenopus  embryos, proper doses of a single molecule, Noggin, can drive ACES cells toward retinal cell differentiation without additional cues. This makes  Xenopus  ACES cells a suitable model system to direct differentiation of stem cells toward retinal fates and encourages further studies on the role of Noggin in the retinal differentiation of mammalian stem cells. STEM CELLS 2009;27:2146–2152

Noggin Elicits Retinal Fate in Xenopus Animal Cap Embryonic Stem Cells