Repetitive DNA sequences form a substantial portion of eukaryotic genomes and exist as members of families that differ in copy number, length, and sequence. Various functions, including chromosomal integrity, gene regulation, and gene rearrangement have been ascribed to repetitive DNA. Although there is evidence that some repetitive sequences may participate in gene regulation, little is known about how their own expression may be regulated. During the course of gene trapping experiments with embryonic stem (ES) cells, we identified a novel class of expressed repetitive sequences in the mouse, using 5' rapid amplification of cDNA ends-polymerase chain reaction (5' RACE-PCR) to clone fusion transcripts from these lines. The expression of these repeats was induced by retinoic acid (RA) in cultured ES cells examined by Northern blot analyses. In vivo, their expression was spatially restricted in embryos and in the adult brain as determined by RNA in situ hybridization. We designated this family of sequences as Dr (developmentally regulated) repeats. The members of the Dr family, identified by cDNA cloning and through database search, are highly similar in sequence and show peculiar structural features. Our results suggest the expression of Dr-containing transcripts may be part of an ES cell differentiation program triggered by RA.