At the cellular level, development proceeds in a series of stages in which precursor cells are first restricted in their developmental potential (determination) and subsequently express their genetic information as specific tissues (differentiation). This paper discusses the problems encountered in seeking to understand the molecular mechanisms of thes processes and describes several model systems. A novel approach involves the inhibition of differentiation by virus transformation of the precursor cells in the chick primary mesenchyme, The transformed cells are cloned, grown to large numbers, and then analyzed biochemically.