Infiltrating adenocarcinomas of the pancreas are believed to arise from histologically identifiable intraductal precursors [pancreatic intraepithelial neoplasias (PanINs)] that undergo a series of architectural, cytological, and genetic changes. The role of DPC4 tumor suppressor gene inactivation in this progression has not been defined. Immunohistochemistry for the Dpc4 protein in formalin-fixed, paraffin-embedded tissue is a sensitive and specific marker for DPC4 gene status, providing a tool to examine DPC4 status in these putative precursor lesions. A total of 188 PanINs were identified in 40 pancreata, 38 (95%) of which also contained an infiltrating adenocarcinoma. Sections containing these 188 duct lesions were labeled with a monoclonal antibody to Dpc4. All 82 flat (PanIN-1A), all 54 papillary (PanIN-1B), and all 23 atypical papillary (PanIN-2) intraductal lesions expressed Dpc4. In contrast, 9 of 29 (31%) severely atypical lesions (PanIN-3 lesions, carcinomas in situ) did not. The difference in Dpc4 expression between histologically low-grade (PanIN-1 and -2) and histologically high-grade (PanIN-3) duct lesions was statistically significant (P < 0.0001). In three cases, the pattern of Dpc4 expression in the PanIN-3 lesions did not match the pattern of expression in the associated infiltrating carcinomas, indicating that these high-grade lesions did not simply represent infiltrating carcinoma growing along benign ducts. Loss of Dpc4 expression occurs biologically late in the neoplastic progression that leads to the development of infiltrating pancreatic cancer, at the stage of histologically recognizable carcinoma.