In normal development, a limited number of cells in the proximal epiblast differentiate into germ cells. In this process, the interaction between primordial germ cells (PGCs) and surrounding somatic cells in the gonad is essential for germ cell development. In the present study, we demonstrated a novel method for inducing mouse embryonic stem cells (ESCs) to differentiate into PGCs using co-culture with undifferentiated gonadal cells or with their extracts. After embryoid bodies (EBs) formed, they were cultured for 10 days. Mvh and Dazla gene expressions increased to a peak, and also the number of Mvh-positive cells increased and were distributed in the peripheral region of EBs co-cultured with undifferentiated gonadal cells, whereas for EBs cultured in the medium supplemented with cell extracts, Mvh-positive cells were scattered within the EBs. Our results demonstrate that growth factors derived from undifferentiated gonadal cells may induce differentiation of ESCs into potential PGCs.