In our previous progress report, we detailed our efforts targeting the human beta-globin gene with zinc finger nucleuses (ZFNs). Our goal was to correct a mutation that results in sickle cell anemia, the most common inherited blood disorder in the United States, affecting ~80,000 Americans. Two recent published reports evaluating the specificity of ZFNs demonstrates the importance of designing highly specific ZFNs to avoid off-target effects. Thus, we have reevaluated our choice of target, our library design, and our mRNA display strategy for designing beta-globin-targeted ZFNs. In addition, we carefully evaluated our protocol for differentiating human embryonic stem cells (hESCs). By combining with growth factors, the undifferentiated hESCs can be directly differentiated into three germ layers through EB formation. The in vivo results also confirmed that hESCs gown in a scaffold could support the growth and differentiation of undifferentiated hESCs into different germ layers by providing physical environment for the interaction of hESCs with host tissues.