The targeted disruption of the two nonallelic insulin genes in mouse was reported previously to result in intrauterine growth retardation, severe diabetes immediately after suckling, and death within 48 h of birth. We have further used these animals to investigate the morphology and cell biology of the endocrine pancreas in late gestation and at birth when insulin is absent throughout development. Pancreatic beta-cells were identified by detecting the activity of the LacZ gene inserted at the Ins2 locus. A significant increase in the mean area of the islets was found at embryonic d 18.5 (E18.5) and in the newborn in Ins1-/-, Ins2-/- animals compared with Ins1-/-, Ins2+/- and wild-type controls, whereas the blood glucose levels were unaltered. The individual size of the beta-cells in the insulin-deficient fetuses was similar to controls, suggesting that the relative increase in islet size was due to an increase in cell number. Immunohistochemistry for proliferating cell nuclear antigen within the pancreatic ductal epithelium showed no differences in labeling index between insulin-deficient and control mice, and no change in the number of beta-cells associated with ducts, but the relative size distribution of the islets was altered so that fewer islets under 5,000 microm(2) and more islets greater than 10,000 microm(2) were present in Ins1-/-, Ins2-/- animals. This suggests that the greater mean islet size seen in insulin-deficient animals represented an enlargement of formed islets and was not associated with an increase in islet neogenesis. The proportional contribution of alpha- and beta-cells to the islets was not altered. This was supported by an increase in the number of cells containing immunoreactive proliferating cell nuclear antigen in both islet alpha- and beta-cells at E18.5 in insulin-deficient mice, and a significantly lower incidence of apoptotic cells, as determined by molecular histochemistry using the terminal deoxynucleotidyl transferase-mediated deoxy-UTP nick end labeling reaction. The density of blood vessels within sections of whole pancreas, or within islets, was determined by immunohistochemistry for the endothelial cell marker CD31 and was found to be increased 2-fold in insulin-deficient mice compared with controls at E18.5. However, no changes were found in the steady-state expression of mRNAs encoding vascular endothelial growth factor, its receptor Flk-1, IGF-I or -II, the IGF-I and insulin receptors, or insulin receptor substrates-1 or -2 in pancreata from Ins1-/-, Ins2-/- mice compared with Ins1-/-, Ins2+/- controls. Thus, we conclude that the relative hyperplasia of the islets in late gestation in the insulin-deficient mice was due to an increased islet cell proliferation coupled with a reduced apoptosis, which may be related to an increased vascularization of the pancreas.