The rat has been an established experimental animal model within many areas of biological investigation for over one hundred years due to its size, breeding characteristics, and knowledge of its physiology and behaviour. In recent years its status as a leading biomedical model has been somewhat surpassed by the mouse. This is largely the result of the isolation and application of mouse embryonic stem (ES) cells. Mouse ES cells have the capacity for unlimited self-renew in vitro whilst maintaining pluripotency and germline competence, and most importantly are amenable to sophisticated reverse genetics strategies such as gene targeting, which have provided a route to germ line modification. Thus far, the derivation of rat ES cells has proved elusive. The generation of rat ES cells would therefore facilitate equivalent applications to rat genetics and significantly strengthen the rat as an experimental model system. Previous attempts to derive rat ES cells led to the isolation of rat ES-like cells. However, whilst these cells exhibit extensive self-renew in vitro, it was known that they fail to maintain significant levels of the key functional ES cell marker Oct4 and do not contribute to chimeras. Rather, these cells express the trophectoderm markers Cdx2 and CyclinD3, and have been termed ExS cells due to their probable extra-embryonic nature. In the work described in this thesis, further investigation of ExS cells revealed the absence of expression of the key pluripotency gene Nanog, although the expression pattern of Nanog in the rat embryo was shown to be similar to that of mouse. It was hypothesised that expression of exogenous Oct4 and Nanog or Sox2 genes could facilitate reprogramming of ExS cells into a 'true' ES cell state. Initial work described in this thesis demonstrated that it was possible to introduce transgenes into rat ExS cells and obtain stable transformants with long term transgene expression. On this basis Oct 4, Nanog and Sox2 transgene expression vectors were constructed and stably integrated into ExS cells, and transgene expression verified. However, no reactivation of an endogenous gene expression profile, characteristic of a true ES cell-like state, was observed in any of the transgenic lines produced. Concurrent with work on ExS cells, investigations by others using chemically defined, serum-free medium containing small molecule inhibitors of MEK and GSK3 (called 3i/2i medium) had demonstrated that it was possible to readily isolate mouse ES cells, even from strains known to be refractory to ES cell isolation. Therefore, the ability of this culture system to facilitate rat ES cell derivation was investigated. Rat 3i/2i cell lines were established from ICM outgrowths of Fischer, DA and Sprague Dawley E4.5 rat embryos. These cells maintained expression of Oct4 and Nanog and could generate complex teratomas consisting of all three germ layers. They were distinct from epiblast stem cells (EpiSC) in that they expressed Klf4, Rex1 and Stella and most importantly, they could contribute to the formation of adult chimaeras and demonstrated germline competency. Isolation of these authentic rat ES cells paves the way for gene targeting in the rat, a development that should greatly facilitate new biomedical discoveries.