To determine the role of insulin-like growth factors (IGFs) and their binding proteins (IGFBPs) in the development of the pancreas, and specifically of the islets of Langerhans, we have examined the cellular distribution and developmental changes in the expression of IGFs and IGFBPs in the pancreas of the fetal and neonatal rat between 19.5 days of gestation and postnatal day 28. This represents a period of substantial growth and restructuring of the beta cell component in islets of this species. IGF-I, IGF-II, and IGFBPs-1 to -6 mRNAs were localized by in situ hybridization, and peptides by immunohistochemistry, in histological sections. IGF-II mRNA was highly expressed in islet cells and some ductal epithelial cells in late fetal and early neonatal life, but was barely detectable by postnatal day 28. IGF-II peptide showed a similar distribution. IGF-I mRNA was barely detected in the fetus or neonate and was localized predominantly in the ductal and acinar tissues after postnatal day 7. IGF-I immunoreactivity was associated with some islet cells in the fetus and neonate, suggesting an endocrine rather than a paracrine source. We performed co-localization studies to assess whether the distribution of IGFs within the pancreas might be due to a sequestration by locally produced IGFBPs. The presence of mRNAs for both IGFBPs-1 and -2 was minimal in the pancreas prior to postnatal day 7, although subsequently IGFBP-1 mRNA was seen in islet cells, while IGFBP-2 mRNA was localized in both islets and acinar tissues. In contrast, both IGFBPs-1 and -2 immunoreactivities were identified in islets from late fetal life, suggesting a circulatory source for these IGFBPs during early pancreatic development. IGFBPs-3 to -5 mRNAs and immunoreactivities were identified within islet cells throughout fetal and neonatal life, with IGFBPs-3 and -5 being mainly associated with the alpha cell-rich islet mantle. The results show a compartmentalization of IGFs within pancreatic tissue, reflecting both paracrine and endocrine sources. The localization and action of IGFs in pancreas likely involves sequestration and distribution by endogenous as well as circulating IGFBPs.