Previous studies describe a unique culture method for the commitment of murine embryonic stem cells to early endocrine pancreata. In this report, early pancreatic-like beta-cell progenitors were enriched and a colony assay devised to allow these progenitors to differentiate into insulin-expressing colonies in vitro. An embryonic stem cell line with enhanced green fluorescent protein (EGFP) inserted into one allele of neurogenin 3 (Ngn3), a marker for pancreatic endocrine progenitors, was differentiated. During the late stage of culture, 20-30% of cells were Ngn3-EGFP(+). Gene expression profiling using the PancChip microarray platform demonstrated that Ngn3-EGFP(+) cells differentially express endocrine-related genes. A novel semisolid culture method was developed to support the formation of individual insulin/C-peptide-expressing colonies from dissociated single cells. Approximately 0.1-0.6% of Ngn3-EGFP(+) cells gave rise to insulin-expressing colonies, a three- to fivefold enrichment of beta-cell-like progenitors, or insulin-expressing colony-forming units (ICFUs), compared with nonsorted cells. All of the single colonies expressed insulin II, while 69% coexpressed insulin I and 44% coexpressed glucagon. Some single colonies expressed insulin I, insulin II, and Pdx-1 (pancreatic duodenal homeobox-1), but not glucagon. In other colonies, glucagon expression overlapped with C-peptide II in double immunostaining analysis, suggesting heterogeneity among the ICFUs and their resulting colonies. Together, these results demonstrate that progenitors that have the potential to give rise to insulin-expressing cells can be derived from murine embryonic stem cells.