It is well known that the Wilms' tumor gene WT1 plays an important role in cell proliferation and differentiation, and in organ development. In this study, to examine the role of the WT1 gene in lineage determination, fetal liver cells from LacZ-transgenic mice, in which WT1 expression was marked by the expression of the LacZ gene driven by WT1 promoter, were FACS-sorted according to LacZ expression of high (LacZ(++)) or undetectable (LacZ(-)) levels, which paralleled endogenous WT1 expression levels. LacZ(++) fetal liver cells were enriched by hepatocyte and endothelial progenitor cells. These results indicated that WT1 expression is a common marker of both hepatocyte and endothelial progenitors. These results also implied a role of the WT1 gene in lineage determination.