The capacity of the fetal sheep pancreas to grow and function when transplanted into athymic mice was examined to determine whether this source of tissue might be of potential use in reversing diabetes. For this purpose fetal sheep pancreases were obtained in the period between 50 days of gestation and fullterm (148 days). Explants (1 mm3) in organ culture secreted insulin for at least 7 days, but in steadily diminishing amounts. Acute exposure to arginine (10 mM) and theophylline (10 mM), but not glucose (20 mM), calcium chloride (10 mM), and sodium butyrate (10 mM), caused acute secretion of insulin. Explants survived for many months when grafted beneath the renal capsule of athymic mice, but their growth was less, the epithelial-like component smaller, and the percentage of endocrine cells (31 +/- 5%) fewer than the case of transplanted fetal human pancreas. The beta cell was the predominant endocrine cell in the ungrafted fetal sheep pancreas. In the transplanted fetal sheep pancreas this was not so, the alpha and PP cells being dominant--beta:alpha:delta:PP = 3:14:3:11. This pattern was unchanged when the recipient mice were hyperglycaemic--beta:alpha:delta:PP = 4:13:4:28, with no reduction of blood glucose levels being observed for up to 4 mo after transplantation. Altering the site of transplantation to the spleen or liver did not improve survival of the endocrine cells. Fetal sheep pancreatic explants when transplanted into athymic rats failed to survive. Thus, although the unusual pattern of endocrine differentiation in fetal sheep pancreas transplanted into athymic mice makes it an interesting model for further studies of fetal development, it is not of benefit in normalizing the blood glucose levels of the recipients.