BACKGROUND: Pluripotency and self-renewal of human embryonic stem cells (hESCs) is mediated by a complex interplay between extra- and intracellular signaling pathways, which regulate the expression of pluripotency-specific transcription factors. The homeodomain transcription factor NANOG plays a central role in maintaining hESC pluripotency, but the precise role and regulation of NANOG are not well defined. METHODOLOGY/PRINCIPAL FINDINGS: To facilitate the study of NANOG expression and regulation in viable hESC cultures, we generated fluorescent NANOG reporter cell lines by gene targeting in hESCs. In these reporter lines, the fluorescent reporter gene was co-expressed with endogenous NANOG and responded to experimental induction or repression of the NANOG promoter with appropriate changes in expression levels. Furthermore, NANOG reporter lines facilitated the separation of hESC populations based on NANOG expression levels and their subsequent characterization. Gene expression arrays on isolated hESC subpopulations revealed genes with differential expression in NANOG(high) and NANOG(low) hESCs, providing candidates for NANOG downstream targets hESCs. CONCLUSION/SIGNIFICANCE: The newly derived NANOG reporter hESC lines present novel tools to visualize NANOG expression in viable hESCs. In future applications, these reporter lines can be used to elucidate the function and regulation of NANOG in pluripotent hESCs.