Using an embryoid body (EB) culture system, we have made a functional organ-like cluster, the "gut" from embryonic stem (ES) cells (ES gut). There are many types of ES clusters, because ES cells have a pluripotent ability to develop into a wide range of cell types. Before inducing specific differentiation by exogenously added factors, we have characterized comprehensive physiological and morphological properties of ES guts. Each ES gut has a hemispherical (or cystic) structure and exhibits spontaneous contractions [mean frequency: 13.5 ± 8.8 cycles per min (cpm)]. A dense distribution of interstitial cells of Cajal (ICC) was identified by c-Kit immunoreactivity, and specific subcellular structures of ICC and smooth muscle cells were identified with electron microscopy. ICC frequently formed close contacts with the neighboring smooth muscle cells and occasionally formed gap junctions with other ICC. Widely propagating [Ca²⁺]_i oscillations were generated in the ES gut from the aggregates of c-Kit immunopositive cells. Plateau potentials, possibly pacemaker potentials in ICC, and electrical slow waves were recorded for the first time. These events were nifedipine-insensitive as in the mouse gut. The present results indicate that the rhythmic pacemaker activity generated in ICC efficiently spreads to smooth muscle cells and drives spontaneous rhythmic contractions of the ES gut. The present characterization of physiological and morphological properties of ES gut will pave the way for making appropriate models to investigate the origin of rhythmicity in the gut.