We have made significant progress in developing a systems biology framework towards understanding the regulatory mechanisms of directing differentiation of human embryonic stem cells (hESCs) into specific lineage. The goal of this project is to build genetic regulatory network in hESC and differentiated cells, and reveal the regulatory interactions at the systems level that are critical for lineage specification. In the first year of the funding period, we have completed the aim of identifying regulatory elements in hESC and the four hESC-derived cells by integrating genomic and epigenomic data. This is a powerful method that is general and would have broad applications in constructing cell-type specific genetic networks. Building these networks is essential for deriving cocktails of driving hESC to differentiate into a specific lineage in the following years. In parallel to our computational efforts, we also started experiments to monitor the directed differentiation of hESC into a specific lineage, which will reveal the molecular mechanisms of the computationally predicted cocktails for directed differentiation. Once completed, this project will open a new avenue of developing novel differentiation protocols of differentiating hESC to a specific cell type that can be used for regenerative medicine. The systems biology method developed in this project will help to avoid tedious trial-and-error approach and greatly facilitate design of new protocols much more efficiently.