AbstractNew, improved media and procedures for making rat chimeric embryos and culturing them in vitro have been developed. We have produced 27 rat chimeras: 20 males and 7 females. This ratio of males to females is consistent with that seen in mouse chimeras, suggesting that rat sex chimeras develop as phenotypic males. By aggregating embryos containing appropriate genetic markers for pigment cell differentiation, it is possible to produce chimeras that elucidate the site of action of the hooded gene. The coat color patterns of black ↔ black hooded chimeras display a white belly spot. In black ↔ albino hooded chimeras, small patches of white hair appear on the head and a large white spot occurs on the belly. Black ↔ agouti hooded chimeras display both agouti and nonagouti pigmentation over the entire surface of the chimera. These animals are fully pigmented with no white spots. In black ↔ albino non‐hooded chimeras, rather small irregular patches of black and white hairs are distributed throughout the pelage. Histological examination of sections of hair follicles obtained from the white areas in the head of black ↔ albino hooded chimeras revealed amelanotic melanocytes. On the other hand, hair bulbs from the white belly spots do not contain any such melanocytes. Thus the white hairs of the head are due to the presence of albino melanocytes, but the white hairs of the belly are due to the total absence of melanocytes. All these observations are consistent with the conclusion that the hooded gene acts within melanoblasts, probably to retard their migration from the neural crest and/or to prevent their entrance into the hair follicles of the white areas of