Differentiation of human embryonic stem cells (HESCs) can be studied in vivo through the induction of teratomas in immune-deficient mice. Cells within the teratomas differentiate into all three embryonic germ layers. However, the exact nature of the proliferation and differentiation of HESCs within the teratoma is not fully characterized, and it is not clear whether the differentiation is cell autonomous or affected by neighboring cells. Here, we establish a genetic approach to study the clonality of differentiation in teratomas using a mixture of HESC lines. We first demonstrate, by means of 5-bromo-2′-deoxyuridine incorporation, that cell proliferation occurs throughout the teratoma, and that there are no clusters of undifferentiated- proliferating cells. Using a combination of laser capture microdissection and DNA fingerprinting analysis, we show that different cell lines contribute mutually to the same distinctive tissue structures. Further support for the nonclonal differentiation within the teratoma was achieved by fluorescence in situ hybridization analysis of sex chromosomes. We therefore suggest that in vivo differentiation of HESCs is polyclonal and, thus, may not be cell autonomous, stressing the need for a three-dimensional growth in order to achieve complex differentiation of HESCs.