Activin A (Act.A), a member of the transforming growth factor beta family of secreted proteins, has been implicated in the regulation of growth and differentiation of various cell types. Betacellulin (BTC), a member of the epidermal growth factor family, converts exocrine AR42J cells to insulin-expressing cells when combined with Act.A. We have used primary cultures of human fetal pancreatic tissue to identify the effects of Act.A and/or BTC on islet development and growth. Exposure to Act.A resulted in a 1.5-fold increase in insulin content (P < 0.005) and a 2-fold increase in the number of cells immunopositive for insulin (P < 0.005). The formation of islet-like cell clusters, containing mainly epithelial cells, during a 5-day culture, was stimulated 1.4-fold by BTC (P < 0.05). BTC alone caused a 2.6-fold increase in DNA synthesis (P < 0.005). These data suggest that Act.A induces endocrine differentiation, whereas BTC has a mitogenic effect on human undifferentiated pancreatic epithelial cells.