Fetal antigen 1 (FA1) is a glycoprotein containing six epidermal growth factor (EGF)-like repeats. It is closely similar to the protein translated from the human delta-like (dlk) cDNA and probably constitutes a proteolytically processed form of dlk. dlk is homologous to the Drosophila homeotic proteins delta and notch and to the murine preadipocyte differentiation factor Pref-1. These proteins participate in determining cell fate choices during differentiation. We now report that FA1 immunoreactivity is present in a number of neuroectodermally derived tumours as well as in pancreatic endocrine tumours. A negative correlation between FA1 and glucagon immunoreactants in these tumours prompted a reexamination of FA1 immunoreactants during fetal pancreatic development. At the earliest stages of development, FA1 was expressed by most of the non-endocrine parenchymal cells and, with ensuing development, gradually disappeared from these cells and became restricted to insulin-producing beta cells. Throughout development FA1 was not detected in endocrine glucagon, somatostatin or pancreatic polypeptide cells. Moreover, developing insulin cells that coexpressed glucagon were negative for FA1. Thus, there was a negative correlation between FA1 and glucagon both in tumours and during development. These results, together with FA1/dlk's similarity with homeotic proteins, point to a role of FA1 in islet cell differentiation.