Human embryonic stem (ES) cells could serve as a potentially unlimited, renewable source of cells with which to treat human diseases. However, as ES cells have an indefinite capacity to self-renewal and to differentiate into cells of all three germ layers, any strategy selected to direct lineage must work efficiently and with a high degree of stability. During ontogeny of the human endocrine pancreas, several transcription factors are known to play key roles in the development of insulin-secreting cells. Of particular interest is the islet-specific transcription factor paired box4 – PAX4, which has been shown to be critical for the establishment of β-cells. We have therefore used PAX4 over-expression in human ES cells to examine the specific actions of the transcription factor on β-cell commitment and functional identity. Our studies have been primarily based upon the H7 human ES cell line, with human foetal and neonatal donor tissues as standard controls. Using a pCAG-PAX4 expression vector, we generated several independent H7.Px4 clonal cell lines following transfection of the H7 ES cells and selection with puromycin. A combination of cell biology and molecular techniques (semi- and quantitative RT-PCR analysis, immunocytochemistry, ELISA and Ca²⁺ microfluorimetry / imaging) were then used to demonstrate that the constitutive expression of PAX4 in human ES cells significantly enhanced the propensity of these cells to form putative – but not fully mature, β-cells during embryoid body-induced differentiation. Key markers of β-cell differentiation and phenotype were found to be PAX4 sensitive and their expression pattern was consistent with that seen in human foetal pancreatic tissue. In conclusion, our experiments have show that constitutive expression of PAX4 in human ES cells substantially enhances the ability of these cells to form putative β-cells.