Instructive influences of fetal mesenchyme were examined in heterotypic tissue recombinants consisting of urogenital sinus mesenchyme (UGM) from male and female rats and distal ductal tips from adult rat prostate. Tissues were grown under the renal capsule of male hosts for periods up to 28 days. Resultant growths exhibited typical prostate histology. Expression of lobe-specific proteins for the ventral (prostatic steroid binding protein [PSBP]) lateral (seminal vesicle secretion II [SVS II]), and dorsal prostate (secretory transglutaminase [TGase]) were examined by immunocytochemistry. Male or female UGM combined with terminal segments of the ventral or dorsal prostate and immunolabeled with antibodies to lobe-specific proteins demonstrated expression of all three secretory products. The pattern of staining was consistent with a compound inductive response from the UGM. Unique to this study was our ability to use a defined mesenchymal tissue (female ventral mesenchymal pad [VMP]). This tissue is specifically associated with ductal branching morphogenesis and cytodifferentiation of the ventral prostate. Distal ductal tips from the dorsal lobe of the adult male prostate when recombined with female VMP and grown in vivo exhibited transformation of secretory phenotype, and the epithelium expressed mRNAs for PSBP. Immunocytochemistry of serial sections did not demonstrate labeling for TGase in the new epithelial growth. Ultrastructural analysis of the heterotypic recombinants indicated that the epithelium had similar characteristics to those of normal ventral prostate. Early stages of the mesenchymal-epithelial interactions resulted in dedifferentiation of the adult epithelium to solid cords of stratified cells. These findings illustrate the potent instructive capacity of a defined fetal UGM to influence development and cytodifferentiation of adult prostate epithelium.