During embryonic development, and possibly also later in life, pancreatic islets of Langerhans originate from differentiating epithelial stem cells. These stem cells are situated in the pancreatic ducts but are otherwise poorly characterized. We found by immunohistochemical staining that protodifferentiated pancreatic epithelial cells from rat embryos of Day 13-Day 15 express the cytoskeletal protein keratin 20, similar to mature duct epithelium. During the period of islet morphogenesis, which occurs between Day 17 and birth, large aggregates of K20-positive duct cells were formed, which gradually differentiated into endocrine cells. This islet morphogenic mechanism has not been described thus far and we did not observe it in postnatal rats. During fetal islet formation, transient expression of vimentin was noted in the duct cells but not in endocrine cells. This intermediate filament protein is not observed in duct epithelial cells after birth. The proto-oncogene product bcl-2, a putative epithelial stem cell marker, was detected in duct cells from fetal and postnatal pancreas. We conclude that K20, vimentin, and bcl-2 are markets for the pancreatic (islet) stem cells.