BACKGROUND: The extraembryonic endoderm (ExEn) defines the yolk sac, a set of membranes that provide essential support for mammalian embryos. Recent findings suggest that the committed ExEn precursor is present already in the embryonic Inner Cell Mass (ICM) as a group of cells that intermingles with the closely related epiblast precursor. All ICM cells contain Oct4, a key transcription factor that is first expressed at the morula stage. In vitro, the epiblast precursor is most closely represented by the well-characterized embryonic stem (ES) cell lines that maintain the expression of Oct4, but analogous ExEn precursor cell lines are not known and it is unclear if they would express Oct4. METHODOLOGY/PRINCIPAL FINDINGS: Here we report the isolation and characterization of permanently proliferating Oct4-expressing rat cell lines ("XEN-P cell lines"), which closely resemble the ExEn precursor. We isolated the XEN-P cell lines from blastocysts and characterized them by plating and gene expression assays as well as by injection into embryos. Like ES cells, the XEN-P cells express Oct4 and SSEA1 at high levels and their growth is stimulated by leukemia inhibitory factor, but instead of the epiblast determinant Nanog, they express the ExEn determinants Gata6 and Gata4. Further, they lack markers characteristic of the more differentiated primitive/visceral and parietal ExEn stages, but exclusively differentiate into these stages in vitro and contribute to them in vivo. CONCLUSIONS/SIGNIFICANCE: Our findings (i) suggest strongly that the ExEn precursor is a self-renewable entity, (ii) indicate that active Oct4 gene expression (transcription plus translation) is part of its molecular identity, and (iii) provide an in vitro model of early ExEn differentiation.