Studies on the developing mammalian pancreas have suggested that insulin and glucagon co-exist in a transient cell population and that peptide YY (PYY) marks the earliest developing endocrine cells. We have investigated this in the embryonic avian pancreas, which is characterised by anatomical separation of insulin and glucagon islets. Moreover, we have compared the development of the endocrine cells to that of processing enzymes involved in pancreatic hormone biosynthesis. PYY-like immunoreactivity occurred in islet cells from the youngest stages examined: it increased in amount from approximately 5 days of incubation and was co-localised with glucagon and to a lesser extent with insulin. Insulin and glucagon cells were numerous: co-existence of the two peptides in the same cells was but rarely observed. From the youngest stages examined, prohormone convertase (PC) 1/3-like immunoreactivity was detected in insulin cells and PC2-, 7B2- and carboxypeptidase E-like immunoreactivity in both glucagon and insulin cells. We conclude that: (1) PYY-like immunoreactivity occurs in avian islet cells but generally in lesser amounts than in mammals at the earlier stages, (2) the paucity of cells co-expressing insulin and glucagon indicate that all avian insulin cells do not pass through a stage where they co-express glucagon and (3) the early expression of the enzymes responsible for the processing of prohormones suggests that this process is initiated soon after islet cells first differentiate.