By immunofluorescence on cytospin preparations and on semithin sections of mouse pancreatic buds, we have found glucagon and pancreatic polypeptide (PP)-containing cells at embryonal day 10.5 (E 10.5) in dorsal buds and at E 11.5 in ventral buds. Insulin-containing cells appear in dorsal buds at E 11.5, and one to two days later in ventral buds. Somatostatin-containing cells are detectable from E 13.5 in both dorsal and ventral buds. A quantitative analysis shows that up to E 15.5, PP-containing cells are relatively abundant in both buds. By PCR amplification of oligo(dT)-primed cDNAs prepared from total pancreatic RNA, we also detect PP mRNA from E 10.5 onwards, thus confirming the early expression of the PP gene in the developing mouse pancreas. Analysis of endocrine cells in situ suggests three major patterns of cell distribution in embryonic pancreas. First, individual hormone-containing cells are located within the epithelium of pancreatic ducts. In both dorsal and ventral buds, the majority of these endocrine cells contain PP, but many also contain glucagon, insulin or somatostatin. Secondly, clusters of endocrine cells are found in the pancreatic interstitium. Many of these cells contain both glucagon and PP which, by immunogold labelling of consecutive thin sections, can be shown to co-exist within individual secretory granules. Finally, starting on E 18.5, typical islets are formed with centrally located B cells and with the adult 'one cell-one hormone' phenotype. These results suggest an intriguing ontogenic relationship between A- and PP-cells, and also indicate that PP-containing cells may occupy a hitherto unexpected place in the lineage of endocrine islet cells.