The phenotypic differences between individual organisms can often be ascribed to underlying genetic and environmental variation. However, even genetically identical organisms in homogenous environments vary, suggesting that randomness in developmental processes such as gene expression may also generate diversity. My laboratory has intensively studied stochastic gene expression in microbial systems and more recently started to apply these concepts to multicellular organisms and stem cells. One of the major lessons learned from our work and others is that microbial systems tend to exploit stochastic gene expression by introducing phenotypic diversity into the population. However it is an open question whether stochastic gene expression benefits or hinders decision-making by cells in a developing embryo. On the one hand, the gene expression patterns of different cells during metazoan development must be aligned either to ensure proper tissue formation or maintain a coordinated timing of developmental events. This suggests that stochastic fluctuations in gene expression may be controlled or their effects may be buffered under normal conditions. On the other hand, stem cells might use fluctuations to prime differentiation. A stem cell might continuously fluctuate between different primed states each biased towards a different germ layer fate. As soon as an external differentiation signal appears the cell would rapidly differentiate towards the fate that was stochastically selected. The overarching goal of this proposal is to the understand how stochastic gene expression is controlled, or utilized, during development and stem cell differentiation using the nematode worm Caenorhabditis elegans and murine embryonic stem cells as experimental model systems. To obtain this goal we will use a combination of quantitative experiments, theoretical and computational approaches, and the development of novel technology.