We recently demonstrated that oncostatin M (OSM) in the presence of glucocorticoid promotes development of fetal hepatic cells in a primary culture system. Our results also suggested that OSM transduces differentiation signals through gp130, a common subunit of the interleukin (IL)-6 family cytokine receptors. However, an essential downstream pathway required for hepatic development remains unknown. To address this issue, we expressed signal molecules by a retroviral expression vector in primary fetal hepatic cells and investigated a signaling pathway essential for OSM-mediated hepatic development. Expression of a dominant-negative form of STAT3 (ΔSTAT3), but not ΔSTAT5, suppressed differentiated phenotypes of hepatocytes induced by OSM. On the other hand, dominant-negative forms of Ras (RasN17) and SHP-2(C463A) rather augmented the expression of hepatic differentiation markers, suggesting that the Ras pathway negatively regulates hepatic development. Consistently, expression of a constitutively activated form of Ras (RasV12) inhibited cellular responses to OSM. Our results indicate that STAT3 is an essential signaling component for OSM-induced hepatic development, while activation of Ras appears to negatively regulate this process. Thus, retrovirus-mediated gene transfer is an effective means to analyze function of a gene in primary fetal hepatic culture.