Murine embryonic stem cells (ESCs) are pluripotent cells that differentiate into multiple cell lineages. It was recently observed that all-trans retinoic acid (RA) provides instructive signals for the commitment of the germ cell lineage from ESCs. However, little is known about the molecular mechanisms by which RA signals lead to germ cell commitment. In this study, we determined if RA induced ESC differentiation to the germ lineage through modulation of the (bone morphogenetic protein) BMP/Smad pathway activity. In a monolayer culture, RA significantly induced both the expression of the early germ-specific genes, Stra8, Dazl and Mvh, and prolonged activation of Smad1/5 (for at least 24 h). Meanwhile, dorsomorphin (a BMP-Smad1/5 specific inhibitor) significantly reduced the RA-induced germ-specific gene expression and completely blocked the RA-induced activation of Smad1/5. Moreover, RA-induced germ-specific gene expression was significantly increased by treatment with the potential activator of Smad1/5, SB431542. Furthermore, the biochemical manipulation of Smad1/5 expression through shRNA knockdown significantly reduced RA-mediated up-regulation of germ-specific gene expression. Our results clearly demonstrate that the Smad1/5 pathway is specifically required at an early stage of germ cell differentiation, corresponding to the RA-dependent commitment of ESCs. (C) 2012 Elsevier Inc. All rights reserved.