We have developed an in vitro gene trap screen for novel murine genes that allows one to determine, prior to making chimeric or transgenic animals, if these genes are expressed in one or more specific embryonic tissues. Totipotent embryonic stem (ES) cells are infected with a retroviral gene trap construct encoding a selectable lacZ/neo fusion gene, which is expressed only if the gene trap inserts within an active transcription unit. G418-resistant ES cell clones are induced to differentiate in vitro, and neurons, glia, myocytes, and chondrocytes are screened for expression of beta-galactosidase (beta-gal). cDNAs of the gene trap transcripts are obtained by 5' rapid amplification of cDNA ends and are sequenced to determine if they represent novel genes. In situ hybridization analyses show that trapped genes are expressed in vivo within the cell types that express beta-gal in vitro. Gene traps and their wild-type alleles are characterized in terms of copy number, alternate splicing of their transcripts, and the proportion of endogenous mRNA sequence that is replaced by lacZ/neo in the hybrid gene trap transcript. This approach, which we term "in vitro preselection," is more economical than standard in vivo gene trap screening because tissue-specific expression of probable knockout alleles is verified before transgenic animals are generated. These results also highlight the utility of ES cell differentiation in vitro as a method with which to study the molecular mechanisms regulating the specification and commitment of a variety of cell and tissue types.