The mts1 gene, a member of the S100 family, is specifically expressed in different metastatic tumor cell lines. After transfection in some nonmetastatic cell lines Mtsl can induce a metastatic phenotype. Mts1 protein can interact with non-muscle myosin, indicating that Mts1 plays a role in cell motility. In order to understand the function of this gene, we studied the expression of the mts1 mRNA and protein in vivo during mouse development. Both mRNA and protein were present in high concentrations from 12.5 to 18.5 days post coitum (dpc) in a variety of developing embryonic tissue of mesodermal origin. We found by double immunostaining with a macrophage-specific antibody that Mts1 protein was highly expressed in fetal macrophages throughout the embryonic mesenchyme and in macrophages colonizing developing lymphatic and non-lymphatic organs. Moreover, we found mts1 expression during differentiation and morphogenesis of mesenchymal tissues such as the mesenchyme surrounding the tips of digits, the mesenchyme underlying the epithelium of the bladder, and the mesenchyme between the primordia of the nasal capsule and the skin as well as in the developing dermal papilla of hair and tooth follicle. In developing bone, Mts1 was expressed in invasive mesenchymal cells and in osteoclasts. The results presented here suggest that Mtsl plays an important role in mouse development during differentiation and function of macrophages and might be involved in different processes associated with mesenchymal morphogenesis including mesenchymal-epithelial interaction, tissue remodeling, and invasion.