The early progenitor cells to the pancreatic islets in the mouse have been characterized so as to re-examine their possible lineage relationships to the four islet cell types found in mature islets. Insulin and glucagon were both first expressed at embryonic day 9.5, and many cells coexpressed these two markers, as shown by light and electron microscopic analysis using double-label immunohistochemistry. Incubation of embryonic pancreas with 1% glutaraldehyde, a fixative commonly used by electron microscopists, abolished this reactivity, thereby explaining reported difficulties in detecting these precursor cells. Using antisera specific for neuropeptide Y (NPY) a peptide with considerable homology to pancreatic polypeptide (PP), we show that NPY first appears with insulin and glucagon immunoreactivity at E9.5, and is co-expressed with glucagon in a majority of adult alpha cells. As we have previously reported, PP itself is first detectable immunocytochemically at postnatal day 1 with PP-specific antibodies. However, antibodies raised against bovine PP are shown by dot blotting to recognize NPY with comparable avidity, indicating that a recent report of islet progenitor cells containing PP at E9.5 (Herrera, P. L., Huarte, J., Sanvito, F., Meda, P., Orci, L. and Vassalli, J. D. (1991) Development 113, 1257-1265), actually represents cross-reactivity to NPY. The data support a model in which early precursor cells to the endocrine pancreas co-activate and co-express a set of islet cell hormone and neural genes, whose expression is both selectively increased and extinguished as development proceeds, concomitant with a restriction to the patterns of expression characteristic of mature islet cell types.