To study the influence of extracellular matrix (ECM) on isolated fetal porcine islet-like cell clusters (ICC), ICC were cultured either embedded in Matrigel (MG) or growth factor-reduced Matrigel (MG-GF), or in the absence of matrix for 20 days. The insulin accumulation in the culture medium was determined every fifth day. After culture, the ICC were retrieved and used for acute insulin release experiments and subsequently subjected to either determination of DNA and insulin contents or immunohistochemistry. It was found that culture in MG and MG-GF significantly increased both the insulin accumulation in the culture medium and the insulin content/DNA compared to culture in the absence of matrix. In addition, MG culture significantly increased the insulin output with time compared with the initial 5-day value. The acute insulin release was significantly higher from the ICC cultured in the presence of matrix, whereas no acute glucose-induced insulin response could be detected. During the culture period, the ICC cultured in the absence of matrix disintegrated and formed a monolayer of cells in the culture dish, whereas the ICC cultured in matrix formed rounded structures containing a substantial number of insulin-positive cells. In some cases, cyst-like structures could be seen after culture in matrix. The data suggest that beta-cell differentiation during fetal development has a dual requirement for extracellular matrix components and growth factors.